American Pressure

“We were absolutely not pushed or pressurised or whatever by the Americans to take action on this,” Karremans said in a recent interview about the Nexperia crisis, a denial that is at odds with everything we know about what happened.

The facts are that US authorities announced on September 30 that they were cracking down on subsidiaries that China has used to get around the US ban on selling chips and chip-making equipment to China. One of those subsidiaries on the “entity list,” a Washington blacklist for US trade, was Nexperia. The parent company, Wingtech, had been on the list since December 2024.

Nexperia is based in the Netherlands, not the United States, so in theory the Dutch could ignore the entity list. Yet the reality of US secondary sanctions on those who deal with designated enemy countries is that European firms that do not fall into line with Washington’s policy risk being cut off from US markets and the dollar, an existential threat for most big companies.

According to Karremans, the Netherlands became aware that Wingtech was a Washington target in 2023. Like any minister of a vassal state would, Karremans then began to negotiate with Wingtech about how Nexperia could become independent of its parent company to ensure that it could continue operating while satisfying the US blacklist.

As negotiations with Wingtech were developing, Karremans claims that they came across evidence that the company was transferring intellectual property and some production capacities to China. On September 30, the same day as the US subsidiary blacklist was released, the Dutch government invoked the Cold War–era Availability of Goods Act to seize Nexperia.

The Dutch government claimed the timing of the seizure and the US blacklist announcement were “purely coincidental.” Yet it is absolutely clear from a court case relating to the Nexperia dispute that this is not true. The court documents describe a meeting this June 12 between Dutch and US officials, during which the American side stressed their unhappiness “that no externally visible measures have been taken.”

It goes on quoting the US official stating that: “It is understandable that a divestment takes time . . . but the fact that the company’s CEO is still the same Chinese owner is problematic. . . . It is almost certain that the CEO will have to be replaced to qualify for the exemption from the entity list.”

The documents also highlight a June 5 email from the Dutch government to Nexperia, which states that should Nexperia seek a waiver from the export ban, “the US has indicated that it will specifically consider mitigation measures to limit the transfer of US IP [intellectual property], technology, knowledge, and capabilities to the country of concern.”

This evidence is nothing more than confirmation of the patently obvious: the Netherlands was forced by the United States to choose between Chinese divestment from Nexperia or Nexperia being treated as toxic waste by the US government and American big business. The Dutch, as they always do, chose to tow Washington’s line, but in trying to satisfy Uncle Sam they tweaked the tail of the Chinese dragon and provoked a backlash.

Semiconductor Shortage

Semiconductors are the engines of the digital economy. Almost every product is now digital, from fridges to watches to seats, which means chips are in almost everything. Europe accounts for less than 10 percent of global chip manufacturing and imports many more chips than it exports.

So when Wingtech responded to the Dutch government seizing control of Nexperia by cutting the subsidiary off from its production facilities in Guangdong, China — crippling 70 percent of Nexperia’s output — trouble was brewing for European manufacturers. The problem accelerated when the Chinese government then banned Wingtech from selling its chips anywhere except China.

Automakers in particular were suddenly panicking. Nexperia’s chips, which are made in Manchester, England, and Hamburg, Germany, and then sent to Guangdong for assembly and reexportation, are widely used in European car manufacturing. In late October, European automakers were reportedly “days away” from closing production lines due to the chip shortage.

“Our plea is that Nexperia China and Nexperia EU come together and actually start to resume normal operations because what’s happening is just inexplicable and it is devastating for hundreds of industries,” one auto executive told the Financial Times.

When the German car industry is in trouble, politicians in Berlin and Brussels are quickly driven to act. Pressure from Germany and the EU was applied to the Dutch government to negotiate with China and resolve the crisis. A Dutch delegation flew to Beijing for talks, but it soon became clear that China was looking for complete submission, not a compromise settlement.

“China hopes Germany will play an active role in urging the Dutch government to take practical steps as soon as possible to correct its erroneous practices, revoke the relevant measures, and promote an early resolution of the issue,” China’s commerce minister said in a call with her German counterpart.

In the end, the threat to European automakers was resolved not by any European politicians but by Donald Trump. This came after the US president struck a deal with Chinese president Xi Jinping at the start of November that paused sanctions for companies on the entity list. In return, Wingtech began to export its chips to Western automakers again.

Having pressured the Dutch into a trade dispute with China over Nexperia that it couldn’t win, the US proceeded to ditch the entire entity list when it was convenient. The Netherlands, and indeed Europe, were used as pawns in Trump’s power games with Beijing.

Unrepentant

With the threat of being blacklisted by the United States gone, the Dutch government was in the clear to patch things up with China, handing the keys to Nexperia back to Wingtech. All that had been achieved by the Nexperia spectacle was to demonstrate just how deferential Europe is to the United States, and how dependent it is on China.

Despite the farce, Karremans is unrepentant, insisting that he would not do anything differently if he had another chance.

“If I had been in the same position, with the knowledge I know now, I would have done the same thing again,” he told the Guardian.

This pigheadedness is typical among the European political class, whose arrogance is inversely related to their acumen. No one appears willing to even pose the difficult questions that the Nexperia crisis exposed, never mind answer them.

Chief among those questions is whether Europe’s deference to the United States has become a major liability in the context of China’s rise. Whereas once the rest of the world would have had to swallow Washington’s diktats as well, the deal between Trump and Xi Jinping — only agreed to by the US president after China threatened to cut the United States off from critical raw materials that the country’s economy cannot do without — shows that China is capable of pushing back, changing the calculus for all countries.

Caught between the hammer of US imperialism and the anvil of China’s industrial strength, Europe is being squeezed economically and politically. The Nexperia U-turn shows that the “old world” has not only lost sovereignty to Washington but to Beijing as well.

Used to bossing around the majority of the world for hundreds of years, Europe has declined so far and so quickly that denial of its new position in the global order has been the stock response among the political class. But with the horrendous EU-US trade deal signed in July and now the Nexperia humiliation, 2025 may be the year when reality begins to bite.