Sanction Netherlands for Enabling Communist China

Sanction Netherlands for Enabling Communist China
A view of a lens used into the manufacturing of semiconductor circuits at ASML, a Dutch company that is currently the largest supplier in the world of semiconductor manufacturing machines via photolithography systems, in Veldhoven, Netherlands, on April 17, 2018. Emmanuel Dunand/AFP via Getty Images
Anders Corr
Updated:
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Commentary
A highly advanced Dutch computer chipmaker is delaying an agreement on U.S. and allied export controls to keep selling its chipmaking machines to China. The company’s CEO and the Netherlands’ trade minister have both publicly resisted measures meant to contain the growing threat from Beijing.

They should know that their technology would likely support China’s economy, military, and the resulting hubris that fuels Beijing’s human rights abuse and militarism.

The Dutch technology could not only be used in China’s weaponry, but in broad economic activities that ultimately support Beijing’s military aggression against U.S. partners in the Asia-Pacific, including Japan, Taiwan, and Australia.

As the regime in China is a supporter of Russia, Iran, and North Korea, the Dutch technology mediately supports those countries’ aggression against U.S. forces in Syria, as well as against Ukraine and South Korea.

The Netherlands and its company, called ASML, are thus putting U.S. national security, not to mention the stability of multiple global hotspots, at risk. They ignore the most basic values of human rights and democracy in their myopic pursuit of short-term profits and the narrowest of national interests.

ASML revenues from China that would be lost from additional controls are likely just $1.9 billion annually, according to its own estimate. ASML’s revenues have steadily grown from just under $9 billion in 2017, to almost $19 billion in 2021.
Depending on the structure of export controls, an analyst at Seeking Alpha estimated the effect of a China ban on the company’s bottom line as “immaterial.” This would, in part, be due to an increase in demand from other chip fabs, including those benefiting from subsidies and tariffs in the United States and European Union.
Employees are seen working on the final assembly of ASML's TWINSCAN NXE:3400B semiconductor lithography tool with its panels removed, in Veldhoven, Netherlands, on April 4, 2019. (Bart van Overbeeke Fotografie/ASML/Handout via Reuters)
Employees are seen working on the final assembly of ASML's TWINSCAN NXE:3400B semiconductor lithography tool with its panels removed, in Veldhoven, Netherlands, on April 4, 2019. Bart van Overbeeke Fotografie/ASML/Handout via Reuters

If ASML insists on selling its technology to China, the United States, European Union, and our allies should, at minimum, ban ASML products from all government-funded products, industrial processes, tariff protections, and subsidies. Why patronize and support a company that trades with the enemy?

The government of the Netherlands is, for this and other reasons, being penny-wise and, in expectation, pound-foolish. It apparently thinks that immaterial ASML profits in China are more important than its good reputation, or the lives of Taiwanese, Tibetans, Uyghurs, and Falun Gong adherents—all of whom are under threat by the Chinese Communist Party (CCP), and none of whom have sufficient support from the international community that supposedly supports peace and human rights.

The latter two groups are facing human rights abuse that amounts to genocide by the U.N. definition. Taiwan is facing the risk of a Ukraine-style war that has already caused 200,000 casualties on both sides in Europe. Tibet has long been under the heel of Beijing and is all but forgotten by the world.

Asia and North America are in a costly arms race because of the CCP’s aggression. ASML’s $2 billion in revenue is obviously not worth the known costs, much less the existential risks from war.

The stock of ASML is publicly traded on global markets, so a minuscule perturbation in its profits should not be of great concern to the Netherlands. ASML’s 32,000 employees will be more important to Amsterdam, though many work outside of the Netherlands itself.

According to Chinese state media, ASML currently “has 15 offices, 11 warehousing and logistics centers, three development centers, one training center and one maintenance center on the Chinese mainland, with more than 1,500 local employees.”

As the world decouples from China due to the CCP’s aggression, ASML should shut all its operations in China or face increased global opprobrium, sanctions, and tariffs.

The CCP’s human rights abuse and support for global human rights abusers should make it obvious to all but the most ethically challenged that the Netherlands and ASML should stop supporting China with high technology. For example, there is a direct link between silicon production in Xinjiang, which by law is assumed to use forced labor, and the silicon chips that ASML machines enable.

Netherlands and ASML can be sanctioned in democracies that value human rights, peace, and democracy above profits and take national security seriously.

Failure to comply with not only the letter, but the spirit of sanctions must entail consequences or remain toothless. The consequences should include an attempt to impose Magnitsky sanctions on the CEO of ASML. If ASML’s CEO cannot be sanctioned according to existing Magnitsky laws, they can be revised to achieve this aim.

Sanctions can spread from the CEO, if he refuses to comply, to all of ASML, and finally to the Netherlands as a country.

Laws could be passed to delist ASML from U.S. and allied stock exchanges.

The Dutch economy can be sanctioned or tariffed at higher rates until it joins more responsible democracies in ensuring that their corporations follow basic environmental, human rights, and political stability measures that should prioritize an end to enabling the regime in Beijing. It must be remembered that communist China is the world’s biggest source of pollution, human rights abuse, and militarism.

It makes no sense that a single Dutch company can hold all of democracy ransom with its single-minded pursuit of profit. The rest of the world should never accept such greed and can effectively work against it with retaliatory sanctions, as well as economic and trade measures.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Anders Corr
Anders Corr
Author
Anders Corr has a bachelor's/master's in political science from Yale University (2001) and a doctorate in government from Harvard University (2008). He is a principal at Corr Analytics Inc., publisher of the Journal of Political Risk, and has conducted extensive research in North America, Europe, and Asia. His latest books are “The Concentration of Power: Institutionalization, Hierarchy, and Hegemony” (2021) and “Great Powers, Grand Strategies: the New Game in the South China Sea" (2018).
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