In late September, the Dutch government announced its decision to take control of Nexperia, a chip manufacturing facility owned by a Chinese entity, which raised concerns within the European automotive sector. This intervention nearly disrupted operations across the European car industry.
Recently, tensions between Europe and China eased when Beijing indicated it would lift restrictions on exporting automotive chips to the EU. This decision provided temporary relief to car manufacturers facing supply issues. Nevertheless, it has prompted discussions regarding the implications of the EU’s relationship with China, leading some to question whether Europe is being positioned as a target amid the broader geopolitical tensions between China and the United States.
Experts have noted that while China has agreed to supply Nexperia chips for civilian use over the next 12 months, this arrangement leaves open the possibility of future interventions. Concerns have been raised regarding China’s influence in the supply of critical materials, which could affect European industries, particularly in technology and defense.
Trade imbalances persist, with a reported deficit of €300 billion favoring China. Initiatives such as the EU’s tariff measures have shown limited effectiveness in improving this situation. Reports indicate that European car manufacturers have faced significant challenges during periods of Chinese export controls on key materials. Some manufacturers have experienced delays due to supply shortages, leading to large numbers of vehicles being parked without necessary components.
Notably, there is growing recognition within the EU about the strategic challenges it faces in sectors heavily reliant on China. The EU’s approach has been characterized as “de-risking” rather than outright decoupling, which aims to balance dependencies while maintaining engagement.
Brussels has signaled a readiness to utilize various trade defense measures against perceived economic coercion, potentially signaling a shift in how it approaches its relationship with China moving forward. However, there remains hesitation, particularly from larger member states like Germany, regarding the implications of a complete economic disconnection from China.
Source: https://www.theguardian.com/business/2025/nov/11/nexperia-row-china-trade-brussels-beijing-chips