EU Reportedly Negotiates Sanction Swap With China to Save German ASML Supplier

The European Union is reportedly negotiating a mutual sanction relief deal with China to save Sindlhauser Materials GmbH, a Bavarian supplier to chip equipment maker ASML. Under the proposed swap, the EU would lift trade restrictions on an unnamed Chinese company accused of supplying key weapon components to Russia. Beijing originally sanctioned Sindlhauser and 13 other European firms in July, officially citing their alleged work with Taiwan. People familiar with the matter say the German firm relies almost entirely on Chinese rare earths, putting it at risk of imminent collapse if the restrictions remain. The standoff demonstrates China's deep visibility into global supply chains, gained through a licensing regime that forces foreign buyers of rare earths to disclose detailed customer and usage data. The negotiations occurred during EU trade chief Maros Sefcovic’s visit to Beijing, as the EU seeks to address a massive trade gap that now exceeds $1B a day.