EU to curb AI chip flows to China as part of US trade deal

Newly published details of the recent EU-US trade deal show the bloc cleaving closer to Washington on technology, security and commerce, potentially driving a new wedge into Europe’s relationship with China.

A joint statement released on Thursday confirmed that the European Union will accept tariffs of 15 per cent on 70 per cent of its exports to the US, as agreed in July. It will also consider exempting American goods from some of its sweeping climate laws, even as it moves to lower tariffs on American products, including industrial goods.

While China is not mentioned once in a 19-point joint statement released on Thursday – billed by Brussels as a “framework” towards a more comprehensive trade agreement – veiled references appeared throughout.

It said the European Union would buy US$40 billion of AI chips from the US, and that it would “adopt” US security standards to “avoid technology leakage to destinations of concern”, a euphemistic term often used to refer to China.

While the US has rescinded a Biden-era order limiting which EU member states could buy US AI chips, the statement shows that it still expects to control where they ultimately go.

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The Europe-China trade relationship: deficits, disputes and de-risking

The Europe-China trade relationship: deficits, disputes and de-risking

At a press conference in Brussels, EU trade chief Maros Sefcovic said the bloc had committed to ensuring the semiconductors do not “fall into the wrong hands”.

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