Geopolitical Measures Chip Conflict Over Nexperia Increasingly Puts Berlin and the EU Under Pressure

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The conflict over Nexperia is escalating further: after the Dutch government unexpectedly took control of the company at the end of September, China's Minister of Commerce Wang Wentao is now calling on Germany to push for a reversal of the measure in The Hague.

The Nexperia case has begun to directly strain German-Chinese relations. China's Minister of Commerce Wang Wentao has called on German Minister of Economics Katherina Reiche to advocate with the Dutch government in The Hague to reverse its actions against Nexperia.

China hopes "that Germany will play an active role in urging the Dutch government to take practical steps as soon as possible to correct its mistaken approach, lift the relevant measures, and promote an early resolution of the issue," Wang told Katherina Reiche, the German Minister for Economic Affairs and Energy.

The remark, published on the website of the Ministry of Commerce in Beijing, increases the pressure on Berlin to clearly position itself in the dispute over Nexperia. The German minister stated, in essence, that they could not comment on bilateral talks between the Netherlands and China but were in contact with The Hague.

Outrage in China

The dispute over Nexperia, acquired by the Chinese company Wingtech in the Netherlands, openly erupted when the government in The Hague suddenly took control of the company on September 30. A decades-old law from the Cold War era, enabling such an extraordinary measure, was activated for this purpose.

The Chinese owner is accused of intending to transfer strategically important know-how to China. This must be prevented in the interest of the Dutch and European economy, The Hague stated. In Beijing, the move is seen as "expropriation" and has triggered great outrage within the government, the media, business circles, and also among the general public.

Puppet Accusations

The media is also heavily speculating about how much pressure the U.S. government in Washington exerted on the Netherlands before finding the old law. The "Bureau of Industry and Security" placed Wingtech on its "Entity" list in December 2024. This U.S. sanctions list includes companies that, from Washington's perspective, threaten the national security or foreign policy interests of the United States.

In the course of the gradual escalation of its trade war with China, the administration of U.S. President Donald Trump had threatened with another "Affiliate Rule," which would also subject wholly owned subsidiaries of Wingtech – including Nexperia – to sanctions. This new regulation was only suspended for one year during the meeting between Trump and Chinese President Xi Jinping in South Korea.

Europe Cannot Escape the Dispute

For several years, China primarily responded to Washington's trade and technology war with calls for dialogue and only very moderate countermeasures. However, in recent months, Beijing has changed its strategy. Every new measure from the U.S. that restricts China's access to high technology, such as chips or lithography machines for their production, is met with similarly harsh boycotts against the U.S. The most significant example of this new stance is Beijing's threats to limit the export of rare earths abroad.

In the dispute over Nexperia, Beijing has also responded with harsh countermeasures. It has temporarily halted the export of Nexperia chips from China, which are completed at the manufacturer's testing and packaging facilities in Dongguan, in the southern Chinese province of Guangdong. The German automotive industry threatens to become a kind of collateral damage in this conflict. Beijing is aware of how difficult it is to manufacture cars without access to Nexperia chips and signals that it expects its trading partners to no longer fully support the U.S. strategy of "containment" against their country. Beijing's message is that supporting U.S. boycotts against China will also have consequences for Europe. While signs of easing tensions are emerging, results are still lacking. (sb)

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