An agreement on tighter controls on Chinese exports would be seen as a major diplomatic victory for US President Joe Biden.
Japan and the Netherlands will soon agree to join the United States in restricting exports of semiconductor manufacturing equipment to China, Bloomberg News reported.
Talks between the countries will conclude as early as Friday, with the Netherlands restricting ASML Holding from selling machinery to China used to make certain types of advanced chips, Bloomberg reported, citing people familiar with the matter.
Japan would impose similar restrictions on Nikon Corp, the report said.
Sources told the Reuters news agency that a deal between Dutch and US officials could be reached by the end of the month as representatives of the two countries meet on Friday in Washington, DC.
Getting the Netherlands and Japan to impose tighter export controls on China would be a major diplomatic victory for US President Joe Biden’s administration, which in October announced sweeping restrictions on Beijing’s access to US chip-making technology to slow its technological and military advances.
Without Japanese or Dutch cooperation, American companies would face a competitive disadvantage.
“We have discussed with the United States and other countries about the export control regime,” Yasutoshi Nishimura, Japan’s economy, trade and industry minister, told reporters on Friday.
“We will implement all measures in accordance with our foreign exchange law and through international cooperation,” he added, declining to provide additional details.
The Japanese company most likely to be hit by the new restrictions would be chip machine maker Tokyo Electron, which relies on China for about a quarter of its sales, said Masahiko Hosokawa, a professor at Meisei University and former chief director of trade controls at the ministry. .
“A balance needs to be found so that no one from Japan, the United States and Europe is disproportionately disadvantaged. It’s about honesty,” he said.
Dutch officials have insisted that the new controls address national security issues and do not favor U.S. chip-related companies, a source familiar with the discussions told Reuters.
Japan expects sales of affected chip-related companies to recover quickly as the market for their equipment expands, a trade and industry official involved in overseeing semiconductor companies told Reuters. He asked to remain anonymous because he is not authorized to speak to the media.