ASML China export curbs came too late, Dutch PM frontrunner says

The Netherlands should have acted quicker to limit the export of ASML Holding NV’s high-tech chipmaking machines to China, according to Dilan Yesilgoz-Zegerius, the leading candidate in this month’s Dutch elections.

The US has been working with the Netherlands and Japan since last year on the restrictions, which are designed to curb China’s technological advancement and prevent it from gaining a military edge. 

The export bans on Dutch companies, which come into effect from January, were implemented at the behest of the US but have angered some local lawmakers who see them as impinging on the Netherlands’s sovereignty: ASML is the country’s most valuable company, and has itself protested the measures as illogical.  

Last month Bloomberg revealed that, in advance of the rules’ coming into effect, Chinese company Semiconductor Manufacturing International Corp. used equipment imported from ASML to manufacture a processor for the Huawei Technologies Co. smartphone whose capabilities so unnerved the US when it was made available for sale in August. 

In hindsight, the Netherlands should have cooperated with the US earlier, Yesilgoz-Zegerius said in an interview at Bloomberg’s Amsterdam office.

While the fractured math of the Netherlands’s multi-party system makes coalitions inevitable, the center-right VVD party she inherited from acting premier Mark Rutte leads opinion polling for the Nov. 22 elections.  

If the Turkey-born candidate captures the top job she would be the first female prime minister of the Netherlands, as well as the first to hold that office having come to country as a refugee.   

Asked about the incoming export restrictions after it became clear existing measures have been insufficient to prevent China from from working out how to manufacture the most advanced semiconductors, Yesilgoz-Zegerius said, “it was probably better if we had taken them before.” 

The pandemic and war in Ukraine laid bare how Europe had previously been “naive” about its security, she said. “We will work with the US because I think that it’s very important for us to be as independent as possible from the countries we don’t want to work with,” she said. “The US is, and always will be, a close partner.”

Her statements put her at odds with some Dutch politicians, including lawmakers from two parties in the ruling coalition, who called for their government to take a stand against the measures.

“Unilaterally changing the rules during a contest where competitiveness and strategic autonomy are at stake is difficult to accept, even by a good ally,” said the Dutch Christian Democrat lawmaker Mustafa Amhaouch, who worked for ASML earlier in his career.

The Dutch government had been debating the national security and independence aspects of ASML restrictions for a long time before the bans, “but you also have to deliver” Yesilgoz-Zegerius said.  

The VVD leader has attracted attention during her campaign over her hard-line stance on immigration. 

Yesilgoz-Zegerius said she opposed a motion approved by the Dutch parliament last week which shrank a benefit that exempts 30% of an expat’s salary from income tax. The amendment drew the ire of Dutch technology companies that rely on foreign talent, including ASML.

“As long as there is not enough talent available in the Netherlands, we are forced to bring in talent from abroad to tackle the challenges we face,” Monique Mols, an ASML spokesperson, had said of the tax benefit cut. 

Still, the number of migrants coming to the Netherlands should be “way lower than what we have right now,” according to Yesilgoz-Zegerius.