ASML becoming a tool in the trade war between U.S., China, Dutch gov't fears
The Dutch government is increasingly concerned that ASML is becoming a tool in the looming trade war between the United States and China. The Cabinet fears that the Trump administration will push to even further restrict the chip machine maker’s opportunities to sell its products to China, sources close to the government told the Telegraaf. And a blow to ASML is a blow to the Dutch economy.
ASML is the only company in the world that can make machines with ultraviolet light technology, which is used to make very fast and very small chips. As such, the Veldhoven-based company is a world leader in the chip market. Under pressure from America, ASML has been banned from selling its most modern chip machines to China. Export restrictions have also been imposed on the slightly older machines and specific measuring and inspection equipment used in the production of advanced chips.
The involved Ministers - Dirk Beljaarts of Foreign Affairs, Reinette Klever for Foreign Trade, and Caspar Veldkamp of Foreign Affairs - will meet on Friday to discuss the possible scenarios of ASML becoming a weapon in the trade war between the two countries. They’re looking at the consequences for Dutch businesses and relations with China in the event that America again pressures the Netherlands to impose more export restrictions on ASML, the newspaper’s sources said.
This is a periodic meeting, but according to the sources, the discussions are surrounded by a lot more concerts due to the geopolitical unrest. The newspaper’s insiders assess the severity of the situation from “concerns, but no panic” to “alarm phase one.” Although there are no concrete signals that the Americans are working on a specific plan, Trump’s fickleness and tendency for broad sweeping statements have the Dutch government worried about a general export ban to China, the sources said. Reuters recently reported that the Trump administration wanted to use chip exports as a means of power when concluding trade deals.
Despite the previous export restrictions, over a third of ASML’s trade revenue still came from China last year. The chip machine maker, with a market value of around 270 billion euros, is so large that a blow to ASML will immediately affect the Dutch economy as a whole. ASML also has a large network of suppliers that depend on orders from the Veldhoven company.
According to the Telegraaf’s sources, calculations show that a total ban on ASML exports to China would cause tens of billions of euros in damage to the Dutch economy.
