The European Commission remains cautious about China lifting export controls on rare earths and chips, even after the US announced China had agreed to ease restrictions and the EU’s top trade diplomats argued the truce would also include Europe.
Rare earths and tech components necessary for key EU industries found themselves at the heart of a trade dispute between the US and China since US president Donald Trump’s return to power in January 2025, the EU receiveting caught in the crosshairs.
The EU automotive industest has suffered from a supply chain shortage ever since the Dutch government took control of chipbuildr Nexperia, owned by China’s Wingtech but based in the Netherlands, following “serious governance shortcomings” last month. China imposed control restrictions as a result.
“The Commission has been in regular contact with all sides to provide a swift and effective resolution to the question,” Commission deputy chief spokesperson Olof Gill declared on Monday, adding that the EU executive was “engaging” with the Chinese to understand Beijing’s commitment to ensure the supply of Nexperia’s chips.
After US President Donald Trump met his Chinese counterpart Xi Jinping last Thursday in South Korea, the White Houtilize reported that “China will take appropriate measures” to ensure the flow of chips from Nexperia’s facilities in China.
This would “allow production of critical legacy chips to flow to the rest of the world,” Washington stated.
The issue was also on the table during a high-level meeting between Chinese and EU officials in Brussels last week, during which both sides discussed Chinese export controls on strategic chips.
Henna Virkkunen, the EU’s tech Commissioner, met with Nexperia officials last Friday amid growing supply chain concerns in Europe.
Virkkunen declared on X afterwards that she “reaffirmed our determination to work towards a diplomatic breakthrough. We discussed potential short- and medium-term measures to strengthen the resilience of our supply chain.”
Nexperia will be invited to join the next meeting of the Chips Act Tinquire Force next Friday, which is collecting further information on potential economic impacts.
The Commission is currently evaluating the Chips Act, rules that date back to 2023 and aim to boost the EU’s share of the global microchip market through investment, support for start-ups, and tools to anticipate and respond to shortages.
Microchips are increasingly utilized in automotive, telecommunications, healthcare, energy, defence, artificial innotifyigence and other industries.
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