The EU executive could not verify on Monday whether China had fully removed export restrictions on rare earths and Nexperia chips intended for European industries.
The European Commission maintains a cautious stance regarding China’s possible easing of export controls on rare earth materials and semiconductor chips, despite the US announcement that China had agreed to relax these restrictions and the EU’s senior trade officials suggesting that the arrangement would also encompass Europe.
Rare earth elements and technological components essential to several major EU sectors have been central to a trade conflict between the US and China since US President Donald Trump resumed office in January 2025, with the EU caught amid the tensions.
The supply chains of the EU automotive sector have experienced difficulties since the Dutch government took over control of the chip manufacturer Nexperia—owned by China’s Wingtech but located in the Netherlands—last month due to serious governance issues. Subsequently, China imposed export restrictions in response.
“The Commission has maintained ongoing dialogue with all parties to achieve a rapid and effective solution,” stated Commission deputy chief spokesperson Olof Gill on Monday, adding that the EU executive is actively communicating with Beijing to clarify China’s commitment to securing the supply of chips from Nexperia.
Following the meeting between US President Donald Trump and Chinese President Xi Jinping last Thursday in South Korea, the White House indicated that “China will implement necessary measures” to guarantee the uninterrupted delivery of chips produced by Nexperia’s plants in China.
Washington emphasized that this would “enable critical legacy chip production to be distributed globally.”
The subject was also addressed during a high-level discussion held last week in Brussels between Chinese and EU representatives, focusing on China’s export controls over strategic chips.
Requirement for diplomatic resolution
Henna Virkkunen, the EU Commissioner for Technology, met with Nexperia officials last Friday amid mounting concerns regarding supply chain disruptions in Europe.
Virkkunen reported on X that she “reaffirmed the commitment to pursue a diplomatic solution. Discussions covered possible short- and medium-term strategies to reinforce supply chain robustness.”
Nexperia is expected to be invited to participate in the upcoming meeting of the Chips Act Task Force next Friday, which is gathering additional data on the potential economic effects.
The Commission is currently reviewing the Chips Act, legislation introduced in 2023 designed to enhance the EU’s share of the global semiconductor market by promoting investment, supporting new enterprises, and implementing mechanisms to forecast and manage shortages.
Microchips are increasingly integral to sectors such as automotive, telecommunications, healthcare, energy, defence, artificial intelligence, and various others.
“It is evident that the supply chain lacks the necessary resilience, and lessons must be drawn accordingly,” she added.
Sigrid de Vries, Director General of the European Automobile Manufacturers’ Association (ACEA), which represents EU car producers, warned last week that “production line halts could occur within days.”
He appealed to “all stakeholders to intensify efforts in securing a diplomatic exit from this critical situation.”
Rare earths remain under negotiation
The Nexperia case unfolds amid a sensitive diplomatic impasse between China and the EU, as Beijing has enforced export restrictions on rare earth elements affecting European companies since April.
Rare earths constitute vital inputs for the EU’s automotive, defence, and green technology industries.
After the Trump-Xi summit, China rescinded newly imposed export restrictions on these strategic materials that had been introduced in October.
European Commissioner for Trade Maroš Šefčovič confirmed on X this past Saturday that the suspension also covers EU industries, though he did not clarify whether the restrictions imposed since April are still in force.
Last week’s Brussels talks concluded without a definitive breakthrough, as the Commission indicated on Monday.
“We are working to tackle all aspects concerning China’s export restrictions of rare earths to the EU,” said Commissioner spokesperson Gill.
“This has been prioritized since the July summit,” Gill added.
European Commission President Ursula von der Leyen met with President Xi in China during the summit in July, where Beijing pledged to establish a fast-track procedure for issuing export licenses for rare earths.
Nonetheless, EU companies continue to report that the system remains burdened by significant administrative complexity.