China has lifted export controls on computer chips vital to car production, the country's Commerce Ministry said on Sunday.
Exemptions were granted for exports made by China's Nexperia for civilian use, it said, which should help automakers who feared production in Europe would be affected.
At the same time, China also suspended a ban on U.S. exports of certain materials that are critical to the semiconductor industry and suspended port charges on U.S. ships.
The moves mark an easing in trade tensions between Beijing and Washington after President Xi Jinping and his US counterpart Donald Trump agreed in October to cut tariffs on each other and suspend other measures for a year.
In October, the Dutch government took control of Nexperia, which is based in the Netherlands but owned by Chinese company Wingtech, to try to protect European supplies of semiconductors for cars and other products.
In response, China blocked the export of the company's finished chips. However, earlier this month it was said that this would mark the beginning of a relaxation of the ban as part of a trade deal concluded between the US and China.
Although Nexperia is headquartered in the Netherlands, about 70% of the chips produced in Europe are sent to China for processing and re-export to other countries.
When the Dutch government took control of the company, it said it made the decision because of “serious management deficiencies” and to ensure the company's chips did not become unavailable in an emergency.
But when China blocked exports of Nexperia chips, there were concerns it could create problems in the global supply chain.
In October, the European Automobile Manufacturers Association (EMEA) warned that supplies of Nexperia chips would only last a few weeks if the Chinese ban was not lifted.
Earlier this month, EMEA chief executive Sigrid De Vries told the BBC that “supply shortages are inevitable.”
Volvo Cars and Volkswagen warned that chip shortages could lead to temporary shutdowns at their factories, while Jaguar Land Rover also said the chip shortage posed a threat to its business.
But on Saturday, EU Trade Commissioner Maros Šefčović announced in a message on X that China has agreed to “further simplify export procedures for Nexperia chips” and will “provide an exemption from licensing requirements to any exporter” provided the goods are for “civilian use.”
“Close engagement with both the Chinese and Dutch authorities continues as we work to establish a strong, stable and predictable framework that will enable the full recovery of semiconductor flows.”
In his statementChina's Ministry of Commerce called on “the EU to continue to exert its influence to persuade the Netherlands to correct its wrong actions as soon as possible.”
Professor David Bailey, from Birmingham University Business School, told the BBC's Today program that China's actions were a “wake-up call” for the car industry.
“The Dutch government may well have had good reasons to try to take control of the situation, but they have not thought through the consequences of doing so,” he said. “China's response was swift and brutal.”
He said there was a need to find alternative processing facilities, “perhaps in Southeast Asia or Europe”, and for the industry to maintain large stocks of its products in case of shortages.
Meanwhile, the suspension of the ban on exports to the US of “dual-use items” related to gallium, germanium, antimony and superhard materials took effect on Sunday and will remain in effect until November 27, 2026.
A ban on the export of goods and materials that may have both civilian and military use was announced in December 2024.
China's Ministry of Transport also said port taxes levied on US-bound ships will be suspended for a year, starting at 0501 GMT on Monday.
On Friday, China also announced the suspension of other export controls related to expanded restrictions on some rare earth materials and lithium batteries.
