Selling damaging US chip move no easy task: China Daily editorial

The US side makes no bones about the core mission of Under Secretary of Commerce for Industry and Security Alan Estevez's planned visits to the Netherlands and Japan early next month. The intention is to press the two US allies to further tighten and expand their implementation of the United States' ban on high-end chip and equipment exports to China.

The requirements are concrete: adding another 11 Chinese companies to the current list consisting of five prohibited enterprises; extending the exports ban to high-bandwidth memory chips needed for the development of artificial intelligence; and scrapping all servicing contracts related to high-end chips between their companies, in particular ASML and Tokyo Electron, and their Chinese partners.

The reason why the Republic of Korea does not appear in the US export control policy chief's itinerary is because its major HBM chipmakers, including SK Hynix, Samsung Electronics and Micron Technology, mainly rely on equipment from ASML and Tokyo Electron. So as long as the latter two companies submit to US pressure, the ROK companies will also be subject to it.

Holding aloft its banner of values, the US implemented its China-targeted chip exports ban in 2022, and pressed the Netherlands, Japan and the ROK to join it last year. But all of the three allies have been quietly resisting the US' pressure. Although they ostensibly stopped their companies exporting high-end chips and equipment to China, their companies still seek to do whatever they can to protect their own interests. That includes providing contracted after-sales services to Chinese partners for the equipment the latter bought before the US ban was introduced.

Meanwhile, the three countries are taking advantage of bilateral and multilateral occasions to negotiate with China to explore ways to sustain their chip companies' China business, as the US side does not, and cannot, provide them with any alternative market that can replace China for their enterprises. It is no secret that some major US chipmaking companies have been doing exactly the same.

All of the three countries want more time to evaluate the impact of the current export bans on high-end chip-making equipment. Not to mention the fact that they are all waiting to see the outcome of the US presidential election in November. So Estevez might find his lobbying a challenging task if he only waves the flag of value diplomacy and cannot tell his hosts how the US can help ASML and Tokyo Electron make up the losses that will result from meeting the new requirements of the US.

Notably, Estevez's planned trip to the Netherlands will follow the swearing-in of the new Dutch Cabinet that shows an even stronger will to protect the national interests of the Netherlands. That the outgoing Foreign Trade Minister Liesje Schreinemacher paid a farewell visit to the US last week to lobby for the interests of ASML is also a telling sign that to maintain the Chinese market is a consensus of the country's political circle.

Not only the Dutch people, but all US allies are wary that the restrictive, coercive, bullying and protectionist moves the US takes targeting China in economy, trade, technology and industry are all to defend the US' hegemony rather than serving other parties' interests.

Estevez's hosts should bear in mind that Washington has already imposed the restrictions on US companies including Applied Materials and Lam Research, and it will not want any foreign companies, even those of its allies, to benefit from its rules-bending moves.

That both the Dutch and Japanese government have declined to comment on Estevez's visits should prepare the US visitor for difficult discussions in both stops, if he cannot resolve their concerns.