BERLIN (Reuters) -The trade dispute between China and the Netherlands over Dutch chipmaker Nexperia that is threatening to disrupt production in the automotive sector needs a quick diplomatic solution as industry alone cannot resolve it, a member of Volkswagen’s supervisory board said.
Olaf Lies – who is also the premier of Volkswagen’s home state of Lower Saxony, which owns a 20% stake in the carmaker – told broadcaster ARD on Monday that Europe risks being dragged into a broadening trade conflict between the U.S. and China.
“We now need a diplomatic solution very quickly so that production can continue for the time being, but beyond this diplomatic solution we also need a little less dependency,” Lies said.
China has banned exports of Nexperia’s finished products in response to the Netherlands seizing control of the company, whose Chinese owner Wingtech has been flagged by the U.S. as a possible national security risk.
The stand-off has left carmakers and their suppliers scrambling for alternatives, with Volkswagen among the companies unable to rule out production stoppages and supplier Bosch preparing to furlough staff if no solution is found.
European auto suppliers will never be fully independent from China, Lies said, adding that producing such parts in Europe is currently more expensive than importing them from abroad.
“That is why we, the state and the EU, must ensure that we are in a position to produce competitively in Europe,” he said.
(Reporting by Rachel More; Editing by Emelia Sithole-Matarise)
