The Netherlands and China's Attempt to Mend Tech Friction After the Nexperia Incident and South Korea's Response

Executive Summary

The Nexperia incident was an eruption at the corporate level of the structural dilemma the Netherlands faces, caught between U.S. pressure for export controls against China and its own semiconductor industry's interests. While a friendly July 2026 meeting between the new Dutch government and China's Ministry of Commerce signals an attempt to restore bilateral ties, a dual track is emerging: at the EU Commission level, trade pressure on China is intensifying, as evidenced by President von der Leyen's 'tipping point' remark. The most likely scenario is a parallel development where Dutch-Chinese bilateral relations improve at the working level, while EU-level regulations on electric vehicles, steel, and telecommunications equipment expand separately. This shows that the core pillars of the U.S.-China strategic competition—controlling advanced technology exports to China and realigning supply chains—are operating at different speeds between the diplomacy of individual EU member states and the trade policy of Brussels. The South Korean government and its semiconductor and materials companies need to manage the risks arising from these inconsistent regulatory signals by establishing a dual-track response system that distinguishes between national strategic technologies and general commercial areas, and by promptly upgrading their infrastructure for rules of origin verification.

I. Analysis of the Current Situation

Attempt to Mend Netherlands-China Tech Friction After the Nexperia Incident: An Analysis of the Current Situation

1. Background and Developments

The conflict surrounding Nexperia in the fall of 2025 was an unusually public case of friction in Netherlands-China relations [1]. Nexperia is a Netherlands-based semiconductor company owned by China's Wingtech. The government in The Hague intervened in the company, citing security concerns, and Beijing's backlash intensified the bilateral conflict [1].

This conflict was not an isolated incident. The Netherlands holds a unique position as Europe's only semiconductor equipment powerhouse, being home to ASML. Since 2019, Washington has persistently pressured The Hague [3]. This resulted in restrictions on exports to China, not only of ASML's EUV lithography equipment but also of older DUV equipment [3]. Although the Dutch government has emphasized that it holds final approval authority under its own trade laws, it has in practice had to balance U.S. pressure against its domestic industry's interests [3]. The Nexperia incident can be seen as a case where this structural pressure erupted at the level of an individual company.

2. Current Situation

In July 2026, a meeting between Dutch Trade Minister Sjoerd Sjoerdsma and Chinese Minister of Commerce Wang Wentao was held in a friendly atmosphere [1]. *The Diplomat* assessed this as a clear signal of 'the new Dutch government's will to restore relations with Beijing' [1]. This is considered an unexpected development given the intensity of last year's conflict [1].

This trend is somewhat at odds with the EU's broader policy stance toward China. Brussels is, in fact, in a phase of intensifying pressure on Beijing. EU Commissioner for Trade Maroš Šefčovič warned that this trend is not sustainable, stating, 'China's exports to the EU continue to grow, while the EU's market share in China continues to shrink' [2]. President of the European Commission von der Leyen, in a speech to the European Parliament, also stated that the trade deficit with China had reached one billion euros a day, declaring that 'we have reached a tipping point' and vowing to use 'all available tools' to recalibrate the relationship [11].

Chinese state media have expressed frustration with what they see as the EU's duplicity. The *Global Times* pointed out that the EU is expanding trade restrictions from electric vehicles to hybrid cars, steel, and downstream products, quoting a Chinese expert who assessed that 'the EU's recent moves are no longer limited to traditional trade remedies for individual products but are expanding to cover broad industrial chains' [9]. The same outlet also conveyed an expert's view on the EU's approach of requesting negotiations while expanding regulations, expressing 'concerns about its sincerity' [9]. The European telecommunications industry is also pushing back. An open letter signed by the CEOs of 17 European telecom operators warned that implementing the amended EU Cybersecurity Act could cost up to 40 billion euros in equipment replacement. In response, Chinese Foreign Ministry spokesperson Guo Jiakun urged the EU to avoid 'discriminatory restrictive measures' [13].

3. Key Actors and Interests

The Dutch Governmentis the central party in this situation. The new government appears to be taking a pragmatic line, balancing the protection of its national industrial asset, ASML, against export control pressure from the United States [1][3]. The deterioration of relations with China following the Nexperia incident likely burdened Dutch industry, which can be read as a background factor for the attempt to restore ties.

China's Ministry of Commerceled by Minister Wang Wentao, is operating on parallel bilateral (with the Netherlands) and EU tracks. While holding friendly talks with the Netherlands [1], it also held a video call with the European Commission's Šefčovič to discuss the 'need to manage disagreements' [4]. The Chinese Ministry of Commerce emphasized that the call was initiated at Šefčovič's request, framing the EU's request for dialogue as a 'noteworthy' signal [4]. This can be interpreted as Beijing's typical tactic of engaging with individual member states and the EU Commission separately.

The European Commissionis showing a different approach from that of individual member states. The von der Leyen-Šefčovič leadership has prioritized correcting the trade imbalance with China, setting an October deadline for results [2][11]. This creates a somewhat contradictory, multi-layered situation where the Netherlands' attempt to restore relations coexists with the EU's hardline stance toward China.

European Industryreveals fractured interests. The telecommunications equipment industry opposes stricter regulations, arguing they harm its capacity for domestic infrastructure investment [13], while the automotive and steel industries demand defensive measures against Chinese imports, creating a coexistence of conflicting positions [9].

4. Key Issues

The first issue is the asymmetric structure where an EU member state is restoring bilateral ties while the EU Commission is simultaneously strengthening pressure on China. The key question is to what extent the warmth in the Netherlands-China channel can soften the EU's overall policy stance toward Beijing.

The second issue is the constant factor of U.S. pressure for export controls on China. The Washington-Hague relationship concerning ASML remains a structural constraint that persists regardless of attempts to resolve the Nexperia issue [3]. Even if the Netherlands improves its relations with China, it will be difficult to escape the line of U.S. pressure.

The third is the conflict of interest among different industries within the EU. There are significant differences in attitude toward regulations on China across sectors like telecommunications, automotive, and steel, which complicates the establishment of a consistent EU-wide approach [9][13].

The implications for South Korea are derived from this multi-layered structure. The Netherlands' unique bottleneck position in the semiconductor supply chain shows that the actions of individual EU member states can act as local variables in the U.S.-China tech rivalry. As a country subject to rules of origin verification, South Korea needs to monitor the ripple effects that subtle changes in EU-China and Netherlands-China relations could have on the business environment for its semiconductor companies in China, distinguishing between the different tracks of engagement.

II. In-Depth Analysis

Attempt to Mend Netherlands-China Tech Friction After the Nexperia Incident: An In-Depth Analysis

1. Analysis of Root Causes

The surface-level flashpoint of the Netherlands-China conflict is the individual company Nexperia. However, the root cause of this conflict is far more structural. The Netherlands is home to ASML, the world's only manufacturer of EUV lithography equipment [3]. The existence of this single company has turned the Netherlands into a geopolitical bottleneck in the U.S.-China tech rivalry.

Since 2019, Washington has persistently pressured The Hague [3]. This has resulted in restrictions on exports to China, covering not only ASML's cutting-edge EUV equipment but also some of its older DUV equipment [3]. The Dutch government has emphasized that it holds final approval authority under its own trade laws. In reality, however, it has had to balance U.S. pressure against its domestic industry's interests [3]. The Nexperia incident can be seen as a case where this dual-pressure structure reached a tipping point and erupted at the corporate level.

The fact that Wingtech is Chinese-owned is another pillar of the root cause. The Hague framed this as a national security issue. Beijing perceived it as discriminatory intervention against its capital. The very frameworks used by the two governments were thus inherently difficult to reconcile.

2. Structural Context

Political Structure: The New Dutch Government's Policy Shift

The friendly atmosphere of the Sjoerdsma-Wang Wentao meeting in July 2026 can be attributed to a shift in the Dutch political landscape [1]. *The Diplomat* noted that 'the new Dutch government has made clear its will to restore relations with Beijing' [1]. This is a policy choice that differs from the previous government's hardline stance on China. It serves as an example of how a change in a coalition government's composition can shift the center of gravity in its China policy.

Economic Structure: The EU-Level Trade Imbalance with China

The Netherlands' attempt to restore relations is moving independently of the EU's overall policy stance toward China. In a speech to the European Parliament, Commission President von der Leyen stated that the trade deficit with China had reached one billion euros a day [11]. She declared that 'we have reached a tipping point' and vowed to use 'all available tools' to recalibrate the relationship [11]. Commissioner for Trade Šefčovič also warned that the trend is not sustainable, noting that China's exports to the EU continue to grow while the EU's market share in China continues to shrink [2].

This structure shows that bilateral diplomacy at the member-state level and multilateral trade policy at the EU level can move at different speeds, and sometimes in different directions. While the Netherlands seeks to restore relations with Beijing, Brussels is expanding trade restrictions from electric vehicles to hybrid cars, steel, and downstream products [9]. The *Global Times* reported a Chinese expert's assessment of this, stating that the measures are 'no longer limited to traditional trade remedies for individual products but are expanding to cover broad industrial chains' [9].

Security Structure: The U.S. Architecture for Export Controls on China

Deep within the Netherlands-China conflict lies the U.S.-designed architecture for export controls on China. This architecture has operated by incorporating semiconductor equipment powerhouses like the Netherlands and Japan into a multilateral control regime. The Netherlands is in a position where its relationships with both Washington and Beijing are simultaneously affected by its compliance with this regime. As seen in the case of Nvidia being excluded from China's data center sales, U.S. regulations tend to accumulate at the regulatory agency level, independent of the diplomatic track [6]. This suggests that no matter how much the Dutch government tries to restore relations with Beijing, regulatory pressure from Washington can continue to build on a separate track.

3. Historical Precedents and Comparison with Similar Cases

This case is a recurrence of the typical dilemma faced by third countries amid the U.S.-China tech rivalry. Similar structures have been observed multiple times. The pressure-filled negotiations between the U.S. and the Netherlands over ASML, ongoing since 2019, are a key precedent [3]. At that time, too, The Hague ultimately made a decision that leaned toward the U.S. position while balancing its domestic industry's interests against allied pressure.

The case of expanding Mexico-China science and technology cooperation also serves as a point of comparison. Between July and September 2026, China's Minister of Science and Technology personally attended the 9th meeting of the science and technology subcommittee of the two countries' permanent commission, co-chaired with Mexico's Minister of Science, Technology, and Innovation, for the first time since the mechanism was established in 2004 [7]. This shows that even countries geographically and economically close to the U.S. have an incentive to broaden technology cooperation with China. Similar to the Dutch case, as U.S.-led decoupling pressure intensifies, third-country governments tend to seek alternative channels to protect their own industrial and research interests.

Bilateral U.S.-China movements ahead of the Trump-Xi summit also offer a relevant precedent. Prior to the summit, the U.S. Trade Representative and the Treasury Secretary met with a Chinese Vice Premier in New York [8]. The two sides are discussing tariff reductions on agricultural and energy products, suggesting a possible extension of the trade truce that has lasted for about a year [14]. If a broader phase of managed relations is established between the U.S. and Chinese leaders, third countries like the Netherlands will have an incentive to seek relatively more room for maneuver in their relations with China. This is a structure where the level of tension in Washington-Beijing relations indirectly affects the temperature of Hague-Beijing relations.

4. Key Variables Shaping Future Developments

The first variable is the pace at which individual measures accumulate at the level of regulatory agencies like the U.S. Department of Commerce. A pattern of bureaucratic regulations building up, regardless of the conciliatory mood at the diplomatic level, has been repeated [6]. For the Dutch government's will to restore relations to lead to tangible results, regulatory pressure from Washington must not be reignited in a new form.

The second variable is the European Commission's October deadline for recalibrating trade with China [2]. With Brussels demanding tangible results by this deadline, the possibility that the Netherlands' bilateral restoration of relations could clash with the EU's common front cannot be ruled out. If a conciliatory stance at the member-state level coexists with a hardline stance at the EU Commission level, it could raise issues of policy coherence within Brussels.

The third variable is the direction of the legal and administrative handling of the Wingtech-Nexperia ownership structure. The actual temperature of bilateral relations will likely depend on whether The Hague's intervention, based on security concerns, is fully withdrawn or merely resolved superficially.

The fourth variable is the outcome of the Trump-Xi summit [5][10]. If confidence-building measures, such as the resumption of arms control talks or the expansion of high-level exchanges, emerge from the summit [10], this could provide a backdrop for European countries, including the Netherlands, to have greater flexibility in their China policies. Conversely, if disagreements on key issues like AI safety come to the forefront [12], hardline views on China within Europe could regain momentum.