The EU is currently in talks with China to lift restrictions the country imposed on Sindlhauser Materials GmbH, a German company in ASML’s supply chain, as the sanctions risk putting the company out of business. In return, the EU would remove restrictions it placed on one unnamed Chinese firm accused of aiding Russia in the war with Ukraine, according to an Oct. 14 Bloomberg report citing people familiar with the matter.

The deal was discussed during EU Commissioner for Trade and Economic Security Maroš Šefčovič’s visit to Beijing. The EU is expected to make the first move, with any delisting on its end requiring unanimous support from member states. Both sides also agreed to share more information and give advance warning on future export restrictions.

In July 2026, China put Sindlhauser, a German precision-manufacturing and advanced-coatings firm, on its export-control list, along with 13 other European companies, in apparent retaliation for the EU’s 21st Russia sanctions package, which sanctioned several Chinese firms accused of supplying Moscow with components that can be used to make weapons. Beijing’s official reason was the firms’ alleged dealings with Taiwan.

China’s selection of Sindlhauser is not random, as the company sits in ASML’s supply chain. According to Bloomberg, officials believe Beijing has spent the last year and a half gathering information on Western supply chains, and used the data to identify the seemingly obscure German firm as a pressure point on the world’s most important chipmaking-equipment company.

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