Report claims US pressured Dutch government to scrap China trade deal

Trump administration reportedly shared intel document to derail semiconductor agreement

Chip technician

The US government has reportedly intervened in a deal that would have seen a Dutch chip manufacturer supply components to a Chinese company, according to sources familiar with the matter.

Dutch firm ASML, a leader in lithography – a process for using light to print minute patterns on silicon – secured a deal with an unnamed Chinese customer that involved a $150 million semiconductor manufacturing machine, and had been granted a license to trade in 2018.

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However, officials from the Trump administration expressed concerns to the Dutch government following the decision, and also shared an intelligence report on the potential repercussions of China acquiring the tech to build super-fast microprocessors, according to sources speaking to Reuters.

Throughout 2018, US and Dutch officials held at least four rounds of talks, according to three unnamed sources. These came to a conclusion on 18 July 2018 when the US Deputy National Security Advisor Charles Kupperman raised the issue during a state visit by the Dutch Prime Minister Mark Rutte. It's during this meeting that the intelligence report was allegedly shared with Dutch officials, according to the sources.

The details of the report have not been released publicly however, following the meeting, the Dutch government decided not to renew ASML's export license.

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Reports of a delay in the trade deal were first reported by the Nikkei Asian Review in November 2019, although it was unclear at the time whether the decision was based on pressure from US authorities. ASML, which has a production plant in the US, has never publicly disclosed its Chinese customer, yet it's widely believed to be Semiconductor Manufacturing International Corp, which is China's biggest chip company.

If true, this high-level push highlights the tactics the US government is now deploying as part of its on-going trade war with China. It's also not the first time the country has leaned on its allies with regards to China.

In 2018, the Wall Street Journal claimed that US officials reached out to their government counterparts to warn of the risk posed by using equipment from Huawei. The Chinese telecoms giant was placed on a trade blacklist at the start of 2019. 

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