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US Treasury Secretary Scott Bessent on Sunday signalled a tentative deal with China to de-escalate their damaging, tariff-fueled trade war — just days before a summit between Presidents Donald Trump and Xi Jinping.In an interview with ABC’s “This Week,” Bessent said the US threat of a 100 percent tariff hike on Chinese goods had effectively been taken off the table in exchange for Beijing deferring curbs on its global rare earth exports.”The tariffs will be averted,” Bessent said after wrapping up talks with Chinese Vice Premier He Lifeng in the Malaysian capital Kuala Lumpur.On the export controls, China will “delay that for a year while they reexamine it,” Bessent said.The secretary’s remarks came as Trump kicked off an Asia tour in Kuala Lumpur that will culminate in a sitdown with Xi in South Korea.Bessent said he expected the two leaders to formally announce the deal at their summit.The secretary said Beijing had also agreed on “substantial” purchases from US farmers, who are a key source of domestic political support for Trump and have been massively impacted by the tariff row between the two countries.China, once the biggest buyer of US soybean exports, simply halted all orders as the trade dispute took hold.”I believe, when the announcement of the deal with China is made public, that our soybean farmers will feel very good,” Bessent said.The secretary said the two sides had also thrashed out a “final deal” over the US version of the wildly popular Chinese social media app TikTok, which boasts around 170 million US users.Citing national security concerns, Washington has sought to wrest TikTok’s US operations from the hands of Chinese parent company ByteDance.Last month, Trump signed an executive order that would place control in the hands of a group of US investors — many of them close allies of the president.”All the details are ironed out, and that will be for the two leaders to consummate that transaction on Thursday in Korea,” Bessent told CBS’s “Face the Nation” in a separate interview.The talks in Kuala Lumpur also touched on the fentanyl trade — a lasting source of friction with Washington accusing Beijing of turning a blind eye to trafficking in the powerful opioid, something it denies.”We agreed that the Chinese would begin to help us, with the precursor chemicals for this terrible fentanyl epidemic that’s ravaging our country,” Bessent said.

India and China resume direct flights on Sunday after a five-year suspension, a move important both for trade and a symbolic step as Asia’s giants cautiously rebuild relations.The neighbours — the world’s two most populous nations — remain strategic rivals competing for regional influence, but ties have eased gradually since a deadly Himalayan border clash in 2020.India’s government said the resumption of flights will boost “people-to-people contact” and aid the “gradual normalisation of bilateral exchanges”.Warming relations with Beijing come as India’s ties with key trade partner Washington struggle, following US President Donald Trump’s order of punishing 50 percent tariffs.Trump’s aides have accused India of fuelling Russia’s war in Ukraine by buying Moscow’s oil.India’s largest commercial carrier, IndiGo, is set to operate the first daily flight to mainland China, departing Kolkata at 10:00 pm (1630 GMT) Sunday for Guangzhou.There are already regular flights between India and Hong Kong, while additional services from the capital New Delhi to Shanghai and Guangzhou will begin in November.”The direct air link will reduce logistics and transit time,” said Rajeev Singh, head of the Indian Chamber of Commerce in Kolkata, telling AFP it would benefit businesses.India’s eastern port city of Kolkata has centuries-old ties with China dating back to British rule, when Chinese migrants arrived as traders. Indo-Chinese fusion food remains a beloved staple of the city’s culinary identity.”It’s great news for people like us, who have relatives in China,” said Chen Khoi Kui, a civil society leader in Kolkata’s Chinatown district of Tangra. “Air connectivity will boost trade, tourism and business travel.”- ‘Long-term challenge’ -India runs a significant trade deficit with Beijing, relying heavily on Chinese raw materials for industrial and export growth.The thaw between New Delhi and Beijing followed meetings between their leaders in Russia last year and in China in August.India’s imports from China surged to more than $11 billion last month, up more than 16 percent compared with September 2024, according to New Delhi’s commerce ministry.Exports from India to China were $ 1.47  billion, modest by comparison, but up around 34 percent year-on-year.Direct flights between the two countries were suspended during the Covid-19 pandemic, halting roughly 500 monthly services.Relations then plummeted after the 2020 border skirmish between the nuclear-armed nations, when at least 20 Indian and four Chinese soldiers were killed.New Delhi responded by tightening restrictions on Chinese investments and banning hundreds of apps, including TikTok.India then deepened ties with the US-led Quad alliance — also including Japan and Australia — aimed at countering China’s influence in the Asia-Pacific.Both sides have troops posted along their contested 3,500-kilometre (2,175-mile) high-altitude frontier.But this month, soldiers on each side exchanged gifts of sweets on the Hindu festival of Diwali, “marking a gesture of goodwill”, said Yu Jing, the spokesperson of the Chinese Embassy in India.The Indian Express, in an editorial after Indian Prime Minister Narendra Modi and China’s President Xi Jinping met in August, said improving ties with Beijing “sends an appropriate signal” to Washington.But relations still have far to go.”Managing an increasingly assertive China remains India’s long-term challenge,” the newspaper added. “These fundamental realities remain unchanged, regardless of Trump’s whimsical diplomatic actions.”

Donald Trump met Saturday with Qatar’s leaders to discuss the fragile truce in Gaza, stopping in the emirate on his way to Asia and talks with China’s Xi Jinping that the US president predicted could yield a “comprehensive deal.”Trump’s refueling stop in Qatar, a key ally in the Gaza negotiations, came as Israel conducted an air strike targeting an alleged Islamic Jihad militant in Gaza, despite the ceasefire brokered by the US president.Trump is set to meet Xi in South Korea on the last day of his regional swing in a bid to seal a deal to end the bruising trade war between the world’s two biggest economies. Trump has also said he would like to meet North Korean leader Kim Jong Un on his trip.He will also visit Malaysia and Japan on the trip, his first to Asia since he returned to the White House in January in a blaze of tariffs and international dealmaking.Aboard Air Force One at Qatar’s Al Udeid Air Base, when asked about ending the trade row with Beijing, Trump said: “I think we have a really good chance of making a really comprehensive deal.”Such an agreement would stave off further 100 percent tariffs on China that are due to come into effect on November 1.During the pit stop at the base, which hosts the regional headquarters for the US military, Trump greeted Emir Sheikh Tamim bin Hamad Al Thani and Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani.”What we’ve done is incredible peace to the Middle East, and they were a very big factor in it,” Trump said.Ahead of the long trip, the US president fueled speculation that he could meet Kim for the first time since 2019, saying: “I’m open to it.”Asked if he would consider North Korea’s demand to be recognized as a nuclear state as a precondition for talks, Trump replied: “Well, I think they are sort of a nuclear power… They got a lot of nuclear weapons, I’ll say that.”Kim has said he would also be open to meeting the US president if Washington drops its demand that Pyongyang give up its nuclear arsenal.- Peace and trade deals -Trump’s first stop will be Malaysia, where he arrives on Sunday, for the Association of Southeast Asian Nations (ASEAN) summit — a meeting he skipped several times in his first term.Trump is set to sign a trade deal with Malaysia, and will witness the signing of a peace accord between Thailand and Cambodia in his continued quest for a Nobel Peace Prize.He said he also expected to meet Brazilian President Luiz Inacio Lula da Silva on the sidelines of the summit to improve ties with the leftist leader after months of bad blood.The US president’s next destination is Tokyo. He will meet Japan’s first woman prime minister Sanae Takaichi, a conservative, on Tuesday.Takaichi said Saturday that she had a “good and candid” initial conversation with Trump.Japan has escaped the worst of the tariffs Trump slapped on countries around the world to end what he calls unfair trade balances that are “ripping off the United States.”- Trump and Xi -The highlight of the trip is expected to be South Korea, with Trump due in the southern port city of Busan on Wednesday ahead of the Asia-Pacific Economic Cooperation (APEC) summit.Trump will meet South Korean President Lee Jae Myung, address an APEC lunch with business leaders and meet US tech bosses for dinner on the sidelines of the summit in the city of Gyeongju.He will meet Xi on Thursday for the first time since his return to office.Global markets will be watching closely to see if they can halt the trade war sparked by Trump’s sweeping tariffs, especially after a recent dispute over Beijing’s rare-earth curbs.Trump said he would also discuss fentanyl with Xi, as he raises pressure on Beijing to curb trafficking of the powerful opioid and cracks down on Latin American drug cartels.burs-jhe/sst/acb

US President Donald Trump met Saturday with the emir and prime minister of Qatar — a key ally in preserving the fragile Gaza peace deal — en route to Asia and high-stakes trade talks with China’s Xi Jinping.The talks came as Israel conducted an air strike targeting an alleged Islamic Jihad militant in Gaza, despite the ceasefire brokered by the US president.Trump is set to meet Xi in South Korea on the last day of his regional swing in a bid to seal a deal to end the bruising trade war between the world’s two biggest economies, and said he would also like to meet North Korean leader Kim Jong Un on his trip.He will also visit Malaysia and Japan on his first trip to Asia since he returned to the White House in January in a blaze of tariffs and international dealmaking.Aboard Air Force One at Qatar’s Al Udeid Air Base, which hosts the regional headquarters for the US military, Trump greeted Emir Sheikh Tamim bin Hamad Al Thani and Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani.”What we’ve done is incredible peace to the Middle East, and they were a very big factor in it,” Trump said.He did not take questions before reporters were ushered out.Earlier, Trump told reporters aboard Air Force One that he hoped for a “very good meeting” with Xi, adding that he expected China to make a deal to avoid further 100 percent tariffs that are due to come into effect on November 1.He also fueled speculation that he could meet Kim for the first time since 2019, when they met in the Demilitarized Zone that separates the two Koreas during the Republican’s first term in office.”I’m open to it,” Trump said.Asked if he would consider North Korea’s demand to be recognized as a nuclear state as a precondition for talks, Trump replied: “Well, I think they are sort of a nuclear power… They got a lot of nuclear weapons, I’ll say that.”Kim has said he would also be open to meeting the US president if Washington drops its demand that Pyongyang give up its nuclear arsenal.- Peace and trade deals -Trump’s first stop will be Malaysia, where he arrives on Sunday, for the Association of Southeast Asian Nations (ASEAN) summit — a meeting he skipped several times in his first term.Trump is set to sign a trade deal with Malaysia, and will witness the signing of a peace accord between Thailand and Cambodia in his continued quest for a Nobel Peace Prize.He said he also expected to meet Brazilian President Luiz Inacio Lula da Silva on the sidelines of the summit to improve ties with the leftist leader after months of bad blood.The US president’s next destination is Tokyo. He will meet Japan’s first woman prime minister Sanae Takaichi, a conservative, on Tuesday.Takaichi said Saturday that she had a “good and candid” initial conversation with Trump.Japan has escaped the worst of the tariffs Trump slapped on countries around the world to end what he calls unfair trade balances that are “ripping off the United States.”- Trump and Xi -The highlight of the trip is expected to be South Korea, with Trump due in the southern port city of Busan on Wednesday ahead of the Asia-Pacific Economic Cooperation (APEC) summit.Trump will meet South Korean President Lee Jae Myung, address an APEC lunch with business leaders and meet US tech bosses for dinner on the sidelines of the summit in the city of Gyeongju.He will meet Xi on Thursday for the first time since his return to office.Global markets will be watching closely to see if they can halt the trade war sparked by Trump’s sweeping tariffs, especially after a recent dispute over Beijing’s rare-earth curbs.A US Treasury spokesman told AFP that US and Chinese officials in Malaysia had concluded a day of “very constructive” trade talks, which are expected to resume on Sunday.Trump said he would also discuss fentanyl with Xi, as he raises pressure on Beijing to curb trafficking of the powerful opioid and cracks down on Latin American drug cartels.burs-jhe/ami-sst/des

US President Donald Trump headed Saturday for Asia and high-stakes trade talks with Chinese counterpart Xi Jinping, saying that he would also like to meet North Korean leader Kim Jong Un on his trip.Trump is set to meet Xi in South Korea on the last day of his regional swing in a bid to seal a deal to end the bruising trade war between the world’s two biggest economies.He will also visit Malaysia and Japan on his first trip to Asia since he returned to the White House in January in a blaze of tariffs and international dealmaking.During a refueling stop on the way there, Trump is expected to meet Saturday with the emir and prime minister of Qatar — a key ally in preserving the fragile Gaza ceasefire deal.Trump told reporters aboard Air Force One that he hoped for a “very good meeting” with Xi, adding that he expected China to make a deal to avoid further 100 percent tariffs that are due to come into effect on November 1.A US Treasury spokesman told AFP that US and Chinese officials in Malaysia concluded a day of “very constructive” trade talks, which are expected to resume on Sunday.As he left Washington, Trump added to speculation that he could meet Kim for the first time since 2019 while on the Korean peninsula.”I’m open to it,” Trump said aboard the presidential plane. “I had a great relationship with him.”Asked if he was open to North Korea’s demand to be recognized as a nuclear state as a precondition for talks, Trump replied: “Well, I think they are sort of a nuclear power… They got a lot of nuclear weapons, I’ll say that.”The two leaders last met in the Demilitarized Zone that separates the two Koreas during Trump’s first term. Kim has said he would also be open to meeting the US president if Washington drops its demand that Pyongyang give up its nuclear arsenal.Seoul’s reunification minister has said there is a “considerable” chance that Trump and Kim will meet while the US leader visits South Korea.- Peace and trade deals -Trump’s first stop will be Malaysia, where he arrives on Sunday, for the Association of Southeast Asian Nations (ASEAN) summit — a meeting he skipped several times in his first term.Trump is set to sign a trade deal with Malaysia, and will witness the signing of a peace accord between Thailand and Cambodia in his continued quest for a Nobel Peace Prize.He said he also expected to meet Brazilian President Luiz Inacio Lula da Silva on the sidelines of the summit to improve ties with the leftist leader after months of bad blood.The US president’s next destination is Tokyo, where he arrives Monday. He will meet conservative Sanae Takaichi on Tuesday after she was named this week as Japan’s first woman prime minister.Takaichi said Saturday in a post on X that she had a “good and candid” initial conversation with Trump.Japan has escaped the worst of the tariffs Trump slapped on countries around the world to end what he calls unfair trade balances that are “ripping off the United States.”- Trump and Xi -The highlight of the trip is expected to be South Korea, with Trump due to land in the southern port city of Busan on Wednesday ahead of the Asia-Pacific Economic Cooperation (APEC) summit.Trump will meet South Korean President Lee Jae Myung, address an APEC lunch with business leaders and meet US tech bosses for dinner on the sidelines of the summit in the city of Gyeongju.He will meet Xi on Thursday for the first time since his return to office.Global markets will be watching closely to see if they can halt the trade war sparked by Trump’s sweeping tariffs, especially after a recent dispute over Beijing’s rare-earth curbs.Trump initially threatened to cancel the meeting and announced the fresh 100 percent tariffs during that row, before saying he would go ahead after all.He said he would also discuss fentanyl with Xi, as he raises pressure on Beijing to curb trafficking of the powerful opioid and cracks down on Latin American drug cartels.burs-jhe/ami/des

The Philippines is laying out the red carpet this week to some of golf’s biggest names, part of a grand government plan to diversify tourism with sport at the forefront.The Southeast Asian nation is pitching for a share of the huge golf tourism market in Asia that is projected to generate $9 billion by 2030, according to figures from US analysts Grand View Research. To showcase what the country can offer, the government has thrown its weight behind this week’s International Series tournament featuring four major champions and the cream of Asia.The country rakes in a shade over $40 billion a year from tourism, say official figures, but the contribution from golf is negligible. That is because the Philippines has not been an easy destination for cash-rich golf tourists, according to industry expert Mike Besa.Private clubs have been largely inaccessible to visitors, with members unwilling to share their facilities.”Golf in our country is difficult, at best,” Besa wrote in the Philippines Business Mirror newspaper.”Most times it’s just frustrating for the unseasoned traveller. “Even large tour operators have thrown their hands up in surrender at the rigours of doing business here.”- Presidential backing -It is far easier to go to Thailand, Malaysia, Vietnam or Japan, where tourists are readily accepted on the course and their cash is welcomed in the clubhouse.Lyle Uy, director for golf tourism and special projects at the Philippine government’s Department of Tourism, has been tasked with changing that landscape and opening up the game. He did not reveal details of the government’s financial investment in this week’s event, one of nine elevated International Series tournaments on the Asian Tour with a $2 million prize fund.But he said its support took many forms.”Number one is trying to convince our friends from different countries to look at the Philippines,” Uy told AFP in the shadow of the opulent Sta. Elena clubhouse, south of Manila.Out on the course, set in a sprawling private estate, former Masters champions Patrick Reed, Dustin Johnson and Charl Schwartzel pulled in big crowds against a backdrop of the Sierra Madre mountains.It is the most prestigious lineup ever assembled for a golf tournament in the Philippines. But the beautifully manicured fairways and greens may reinforce a view that golf is only for the rich in a country where poverty is rife and the average GDP per capita is about $4,000. In nearby Hong Kong it is $54,000.”Most of the golf courses here are private. More than 90 percent,” admitted Uy. “So we’re looking into actually extending the support to the owners of these properties so that they open up.”His department has powerful backing. Two years ago President Ferdinand Marcos Jr. declared an ambition to make the Philippines a sports tourism destination.- Accessible, affordable -Patrick Gregorio is chairman of the Philippines Sports Commission, which is responsible for developing athletes.He believes that the government commitment means they can convince clubs to throw open their doors to help grow the game.”When you say accessible that means affordable,” Gregorio told AFP. “I am sure that the private clubs will help. If we, the Philippines Sports Commission, give them a clear programme then they will support it.”It will really change the landscape of golf in the Philippines.”Tourism to the Philippines accounts for almost 10 percent of the country’s GDP, mainly generated from people seeking sand, sea, surf and scuba diving. “We are known for our beaches, but at the end of the day, there is a lot more to the Philippines,” said Uy.”It’s not only golf. We are looking into triathlon. We’re looking at running. Our marathons are starting to pick up. We have diving.”The push to make the Philippines a premier sporting destination does not begin and end with hosting a top-class golf tournament.In recent years the country has staged a Basketball World Cup, a Volleyball World Championship and the Southeast Asian Games.In conjunction with the top-class field this week, music concerts are part of an entertainment package to send a message that the Philippines should be on every golf tourist’s to-do list.”Hopefully the buzz around this event helps golf in the Philippines grow faster,” Reed, the 2018 US Masters champion, told AFP.”The easiest way to grow the game is to bring in the best players in the world to showcase golf and its fun side.”That’s what I think this week will do, especially for younger generations.”

US President Donald Trump left on Friday for Asia and high-stakes trade talks with Chinese counterpart Xi Jinping — adding that he would also like to meet North Korean leader Kim Jong Un on his trip.Trump is set to meet Xi in South Korea on the last day of his regional swing in a bid to seal a deal to end the bruising trade war between the world’s two biggest economies. He will also visit Malaysia and Japan on his first trip to Asia since he returned to the White House in January in a blaze of tariffs and international dealmaking.A senior US official said on Friday that Trump would “deliver for the American people in one of the most economically vibrant regions of the world, signing a series of economic agreements.”As he left Washington, Trump added to speculation that while on the Korean peninsula he could meet Kim Jong Un for the first time since 2019 during his first presidency.”I’d like to, he knows we’re going there,” Trump told reporters at the White House. “We let him know, he knows that I’m going.”Talk about a possible meeting with Kim while Trump is in South Korea for a regional summit grew after Seoul’s reunification minister said there was a “considerable” chance.The White House had said earlier that a meeting was “not on the schedule.”- Peace and trade deals -Trump’s first stop will be Malaysia, where he arrives on Sunday, for the Association of Southeast Asian Nations (ASEAN) summit — a meeting Trump skipped several times in his first term.Trump is set to ink a trade deal with Malaysia, but more importantly he will oversee the signing of a peace accord between Thailand and Cambodia, as he continues his quest for a Nobel Peace Prize.Brazilian President Luiz Inacio Lula da Silva may also meet Trump on the sidelines of the summit to improve ties after months of bad blood, officials from both countries told AFP.Trump’s next stop will be Tokyo, where he arrives on Monday. He will meet conservative Sanae Takaichi, named this week as Japan’s first woman prime minister, on Tuesday.Japan has escaped the worst of the tariffs Trump slapped on countries around the world to end what he calls unfair trade balances that are “ripping off the United States.” – Trump and Xi -But the highlight of the trip is expected to be South Korea, with Trump due to land in the southern port city of Busan on Wednesday ahead of the Asia-Pacific Economic Cooperation (APEC) summit.Trump will meet South Korean President Lee Jae Myung, address an APEC lunch with business leaders and meet US tech bosses for dinner, on the sidelines of the APEC summit in the city of Gyeongju.On Thursday, Trump will meet Xi for the first time since his return to office.Global markets will be watching closely to see if the two men can halt the trade war sparked by Trump’s sweeping tariffs earlier this year, especially after a recent dispute over Beijing’s rare earth curbs.Trump initially threatened to cancel the meeting and imposed fresh tariffs over the critical minerals row, before saying he would go ahead after all.”The president is most interested in discussing the trade and economic relationship,” another senior US official said.Trump himself said on Thursday that the first topic on the agenda would be fentanyl, as he boosts pressure on Beijing to curb drug trafficking and cracks down on Latin American drug cartels.

US President Donald Trump leaves on Friday for Asia and high-stakes talks with Chinese leader Xi Jinping — as Washington played down speculation that he could meet North Korea’s Kim Jong Un.Trump is set to meet Xi in South Korea on the last day of his trip, aiming for a “deal on everything” to end a bitter trade war between the world’s two biggest economies.The 79-year-old will also visit Malaysia and Japan on his first Asian trip since he returned to the White House in January in a blaze of tariffs and geopolitical deal-making.A senior US official said on Friday that Trump would “deliver for the American people in one of the most economically vibrant regions of the world, signing a series of economic agreements.”Talk about a possible meeting with Kim while Trump is in South Korea for a regional summit mounted after Seoul’s reunification minister said there was a “considerable” chance.But the US official said it was “not on the schedule,” despite both leaders having said they would like to rekindle the unlikely relationship they fostered during Trump’s first term.- Peace and trade deals -His first stop will be Malaysia, where he arrives on Sunday, for the Association of Southeast Asian Nations (ASEAN) summit — a meeting Trump skipped several times in his first term.Trump is set to ink a trade deal with Malaysia, but more importantly he will oversee the signing of a peace accord between Thailand and Cambodia, as he continues his quest for a Nobel Peace Prize.Brazilian President Luiz Inacio Lula da Silva may also meet Trump on the sidelines of the summit to improve ties after months of bad blood, officials from both countries told AFP.Trump’s next stop will be Tokyo, where he arrives on Monday. He will meet conservative Sanae Takaichi, named this week as Japan’s first woman prime minister, on Tuesday.Japan has escaped the worst of the tariffs Trump slapped on countries around the world to end what he calls unfair trade balances that are “ripping off the United States.” – Trump and Xi -But the highlight of the trip is expected to be South Korea, with Trump due to land in the southern port city of Busan on Wednesday ahead of the Asia-Pacific Economic Cooperation (APEC) summit.Trump will meet South Korean President Lee Jae Myung, address an APEC lunch with business leaders and meet US tech bosses for dinner, on the sidelines of the APEC summit in the city of Gyeongju.On Thursday, Trump will meet Xi for the first time since his return to office.Global markets will be watching closely to see if the two men can halt the trade war sparked by Trump’s sweeping tariffs earlier this year, especially after a recent dispute over Beijing’s rare earth curbs.Trump initially threatened to cancel the meeting and imposed fresh tariffs over the critical minerals row, before saying he would go ahead after all.”The president is most interested in discussing the trade and economic relationship,” another senior US official said.Trump himself said on Thursday that the first topic on the agenda would be fentanyl, as he boosts pressure on Beijing to curb drug trafficking and cracks down on Latin American drug cartels.Trump’s former advisor Steve Bannon told Politico the Xi talks were a risky move by the US leader given the huge implications if the talks collapse, calling it a “throw of the iron dice.” But analysts warned not to expect any breakthroughs.”The meeting will be a data point along an existing continuum rather than an inflection point in the relationship,” said Ryan Hass, a senior fellow at the Brookings Institution.

European automakers already buffeted by US tariffs and a rocky shift toward electric vehicles now face a new threat: a shortage of key semiconductors supplied by Chinese-owned Nexperia.Beijing is locked in a standoff with Dutch officials who invoked a Cold War-era law in September to effectively take over the company, whose factories are in Europe.Carmakers as well as parts suppliers have already warned of shortages that would force stoppages at production lines across the Continent.Who is Nexperia?The company produces relatively simple technologies such as diodes, voltage regulators and transistors that are nonetheless crucial, as vehicles increasingly rely on electronics.The chips are mainly found in cars but also in a wide range of industrial components as well as consumer and mobile electronics like refrigerators.It makes them in Europe before sending them to China for finishing, and are then re-exported back to European clients.Based in the Netherlands and once part of electronics giant Philips, it was bought by Wingtech Technology of China in 2018.But in September, the Dutch government took the unusual step of taking over the company, citing its “Goods Availability Law” of 1952 to ensure essential items.In response, China banned any re-exports of Nexperia chips to Europe, igniting fresh geopolitical tensions.Why is the automotive sector vulnerable?Nexperia supplies 49 percent of the electronic components used in the European automotive industry, according to German financial daily Handelsblatt.The European auto lobby ACEA warned this month that production would be seriously hit.”Without these chips, European automotive suppliers cannot build the parts and components needed to supply vehicle manufacturers and this therefore threatens production stoppages,” the group said.For Germany alone, analysts at Deutsche Bank forecast a production drop of 10 percent while warning of a 30-percent cut in a “worst-case scenario”.How are automakers responding? German auto giant Volkswagen has warned that it cannot not rule out “short term” production stoppages, while emphasising that it is searching for alternative suppliers.Nexperia does not supply it directly but some of its parts suppliers use its chips. Bosch, for example, says it has not yet reduced employee shifts at its German sites “but we are preparing to do so at our Salzgitter site”, a spokesman told AFP.But French parts maker Valeo said it had “visibility for the coming weeks” with regards to “all its components”. It said it had found alternatives for “95 percent of the volumes” bought each year from Nexperia, but “they haven’t yet been approved by our clients”. Other suppliers?According to OPmobility, another French parts maker, Nexperia’s chips, while widely used, are not “unique” in terms of technology and therefore “easily substitutable”. But suppliers have to get the new products approved by automakers, which cannot be done quickly.”They’re looking frantically for other suppliers but these firms cannot build production capacity overnight,” said Ferdinand Dudenhoeffer, director of Germany’s Center Automotive Research institute.”In the worst case this situation could go on for 12 to 18 months,” he told AFP.He added however since the disruptions cause by global lockdowns during the Covid-19 pandemic, “we’ve learned to pay more attention, both among general management and purchasing teams”.In any case, Dudenhoeffer said, “100 percent protection against supply disruptions is impossible — or in any case prohibitively expensive”.