The European Fee stays cautious about China lifting export controls on uncommon earths and chips, even after the US introduced China had agreed to ease restrictions and the EU’s high commerce diplomats argued the truce would additionally embody Europe.
Uncommon earths and tech parts needed for key EU industries discovered themselves on the coronary heart of a commerce dispute between the US and China since US president Donald Trump’s return to energy in January 2025, the EU getting caught within the crosshairs.
The EU automotive business has suffered from a provide chain scarcity ever for the reason that Dutch authorities took management of chipmaker Nexperia, owned by China’s Wingtech however primarily based within the Netherlands, following “critical governance shortcomings” final month. China imposed management restrictions in consequence.
“The Fee has been in common contact with all sides to offer a swift and efficient decision to the query,” Fee deputy chief spokesperson Olof Gill mentioned on Monday, including that the EU government was “participating” with the Chinese language to know Beijing’s dedication to make sure the availability of Nexperia’s chips.
After US President Donald Trump met his Chinese language counterpart Xi Jinping final Thursday in South Korea, the White Home reported that “China will take applicable measures” to make sure the circulate of chips from Nexperia’s amenities in China.
This could “permit manufacturing of essential legacy chips to circulate to the remainder of the world,” Washington said.
The difficulty was additionally on the desk throughout a high-level assembly between Chinese language and EU officers in Brussels final week, throughout which each side mentioned Chinese language export controls on strategic chips.
Diplomatic breakthrough wanted
Henna Virkkunen, the EU’s tech Commissioner, met with Nexperia officers final Friday amid rising provide chain issues in Europe.
Virkkunen mentioned on X afterwards that she “reaffirmed our willpower to work in the direction of a diplomatic breakthrough. We mentioned potential short- and medium-term measures to strengthen the resilience of our provide chain.”
Nexperia can be invited to affix the following assembly of the Chips Act Activity Drive subsequent Friday, which is gathering additional data on potential financial impacts.
The Fee is at the moment evaluating the Chips Act, guidelines that date again to 2023 and purpose to spice up the EU’s share of the worldwide microchip market by means of funding, assist for start-ups, and instruments to anticipate and reply to shortages.
Microchips are more and more utilized in automotive, telecommunications, healthcare, vitality, defence, synthetic intelligence and different industries.
“It’s clear that our provide chain lacks the resilience required, and we should draw the mandatory classes,” she added.
Sigrid de Vries, Director Common of European Car Producers’ Affiliation (ACEA), representing EU carmakers, warned final week that “meeting line stoppages would possibly solely be days away”.
He urged “all concerned to redouble their efforts to discover a diplomatic manner out of this essential scenario.”
Uncommon earths nonetheless below dialogue
The Nexperia episode comes amid a tense diplomatic standoff between China and the EU, as Beijing has been imposing export restrictions on uncommon earth parts on European corporations since April.
Uncommon earths are key parts for the EU automotive, defence and inexperienced tech industries.
Following the Trump-Xi assembly, China lifted new restrictions on exports of those strategic parts that it had introduced in October.
European Commissioner for Commerce Maroš Šefčovič confirmed on X on Saturday that the suspension utilized additionally to EU industries, nonetheless with out specifying whether or not controls from April nonetheless utilized.
Final week’s assembly in Brussels got here with no actual breakthrough, the Fee implied on Monday.
“We are attempting to deal with all features of any restrictions to the export from China to the EU on uncommon earths,” Fee spokesperson Gill mentioned.
“We made this a precedence subject for the reason that summit in July,” Gill added.
European Fee President Ursula von der Leyen met with Xi in China throughout a July summit, the place Beijing dedicated to implementing a fast-track mechanism for export licences for uncommon earths.
Nonetheless, EU companies proceed to complain that the system is an administrative nightmare.
