Dutch caretaker Economy Minister Micky Karremans and Chinese Commerce Minister Wang Wentao held talks on October 21 to seek a resolution to the standoff over chipmaker Nexperia, following Beijing’s imposition of export restrictions on products from the firm’s Chinese factories.

In a statement following the meeting, Karremans said the ministers discussed possible solutions and agreed to remain in contact, though no immediate progress was reported, and Beijing has yet to issue a public comment on the talks.

Why Nexperia matters

Nexperia is a global leader in high-volume discrete semiconductors, diodes, transistors, and power components, used across automotive systems, industrial controls, and consumer electronics. These parts are not the most advanced chips, but they are built in very large volumes and are frequently “designed-in” to vehicle platforms and supplier systems, which makes them operationally indispensable for many automakers. Disruption to Nexperia’s flows, therefore, creates immediate and systemic risks rather than isolated component shortages.

Beijing’s curbs on exports from Nexperia’s Chinese factories followed the Dutch government’s invocation of emergency powers under the 1952 Goods Availability Act, a rarely used measure taken on September 30, which places the company under temporary state oversight amid concerns over governance and the potential transfer of strategic capabilities.

The Chinese export control notice, issued in early October, prohibited certain finished components and sub-assemblies from leaving China, a move that directly threatened the steady supplies Nexperia provides to European suppliers and carmakers. The Dutch government’s use of the Goods Availability Act marks an unprecedented expansion of the law, which was originally intended for wartime shortages, not operational oversight of a foreign-owned tech company. By applying it to secure continuity of industrial supply, the move sets a concerning precedent: future governments could invoke emergency powers against strategic foreign investments during political or economic tensions.

The lack of a detailed public explanation for the action adds further risk, further highlights Western arbitrariness, and invites retaliatory measures, as seen with Beijing’s export curbs. While aimed at protecting European supply chains, the measure has unintentionally weaponized economic policy, undermined investor confidence, and heightened supply-chain fragmentation across the continent.

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Automakers on the brink

European carmakers and industry groups have sounded an urgent alarm. The European Automobile Manufacturers’ Association (ACEA) and national industry associations warn that the suspension or interruption of Nexperia deliveries could quickly translate into assembly-line stoppages because manufacturers operate with thin inventories for many standard parts, and since substitution requires lengthy qualification processes.

The ACEA, which represents major European companies including BMW Group, DAF Trucks, Ferrari, Honda Motor Europe, Mercedes-Benz, Volkswagen Group, and Volvo Group, stressed that the development is affecting a large number of suppliers.

“This is a cross-industry issue affecting a large number of suppliers and virtually all of our members,” said ACEA Director General Sigrid de Vries.

“We suddenly find ourselves in this alarming situation. We really need quick and pragmatic solutions from all countries involve,” she urged.

Germany’s auto association and major manufacturers have publicly flagged the potential for near-term production disruptions unless the supply issue is resolved. 

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Why the Netherlands intervened

Dutch authorities framed their intervention as a matter of technological and economic sovereignty: regulators said there were “serious governance shortcomings” and a risk that crucial production or know-how could be taken out of the European supply base, justifying the use of the Goods Availability Act to protect continuity of supply in an emergency.

The move came amid mounting Western pressure, including US export-control policies aimed at limiting certain technology flows to China, and reflected a broader shift toward defensive and protectionist measures for strategic industrial assets. The intervention, however, immediately raised the political and diplomatic stakes with Beijing, which was quick to respond.

Why can't Chinese manufacturers be replaced quickly

Two practical constraints make rapid replacement, which ACEA complained about, unlikely.

First, qualification and safety cycles for automotive parts are long: Original Equipment Manufacturers (OEMs) and tier-1 suppliers must validate parts to strict reliability and automotive-grade standards before approving them for production.

Second, the concentration of volume supply means a small number of suppliers carry the bulk of certain discrete families and packages. As pointed out by the ACEA, even if technically comparable parts exist elsewhere, re-routing supply or re-qualifying alternatives typically takes months to years, not days, and often requires design changes at the vehicle level. Experts and industry analyses therefore, view short-term substitution as an impractical fix.

Unless both sides secure a narrow, operational compromise that restores exports, the damage will be measured not in political rhetoric but in halted production lines and delayed deliveries across Europe’s suffering auto sector. How the Karremans-Wang talks proceed will shape not only the fate of one company but also longer-term norms about cross-border control over critical industrial suppliers, in the wake of escalating economic confrontations, including export bans, emergency government interventions, and the broader contest over control of strategic technology between Europe, China, and the US.

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