The Netherlands has relinquished control of Chinese-owned chipmaker Nexperia, citing “constructive meetings” with Beijing authorities. Economy Minister Vincent Karremans announced the decision, stating that he was suspending supervisory control of the company as “a show of goodwill” after productive talks with Chinese officials. The move comes after the Dutch government nationalized Nexperia last month, citing risks to the EU’s economic and technological security.

The nationalization was made under a Cold War-era emergency law, due to concerns over “serious governance shortcomings” and the potential shift of key chip-making capabilities out of the EU. The decision triggered a strong response from Beijing, which restricted Nexperia’s exports from China, affecting roughly half of the company’s output. This, in turn, had a ripple effect on the auto sector, forcing production cuts at several European plants.

The Dutch takeover occurred amidst escalating trade tensions between the EU and China. The two have clashed over allegations of Beijing’s dumping of industrial goods, including electric vehicles, batteries, and solar panels, as well as state-backed overproduction that undercuts European manufacturers. China has denied these accusations, accusing the EU of protectionism.

In recent months, the EU has launched trade probes into Chinese-made electric vehicles and green-tech components, prompting warnings from Beijing that such moves would “seriously disrupt” supply chains. China has also expanded export controls on rare earth elements, permanent magnets, and other critical materials, which could have a significant impact on Europe’s struggling auto and electronics industries.

According to reports, the US had urged European allies to block Beijing’s access to advanced semiconductor technology, which may have contributed to the Dutch authorities’ decision to take control of Nexperia. The suspension of supervisory control marks a shift in the situation, with Karremans noting that Chinese authorities have taken steps to ensure steady chip supplies to Europe. Talks between the Netherlands and China are set to continue, aiming to resolve the issues surrounding Nexperia and the broader trade tensions between the EU and China.