There’s a tense economic relationship between the Netherlands and China over the production of computer chips that are crucial for the automotive industry.

It all started when the Dutch government took control of Nexperia, a chip company headquartered in the Netherlands but actually owned by a Chinese company called Wingtech. This led China to restrict exports of Nexperia computer chips, which in turn created supply chain issues for the global car and truck industry.

Now, the Dutch government is taking a step back from this intervention. But there's a larger ongoing story here about international trade — one that includes the U.S.

Toby Sterling is a senior correspondent at Reuters. He's been following this and recently spoke to “Marketplace Morning Report” host Sabri Ben-Achour from the Netherlands. The following is an edited transcript of their conversation.

Sabri Ben-Achour: Can you help me understand this story from the beginning: Why did the Dutch government take over Nexperia, a Chinese company? Also, how did it do that?

Toby Sterling: Shortly before the Dutch government decided to act — according to the Dutch side now — the manager, who is a Chinese gentleman named Zhang Xuezheng, or Mr. Wing, and he began kind of acting to move intellectual property and kind of refocus the company's operations in China. And that was what prompted the Dutch government to intervene.

Ben-Achour: We've kind of seen this happen before — for example, in the U.S., with magnets and some electric vehicle technology. A Chinese company will buy an entity and basically just shut it down and move it to China. Is that a strategic move, or is that just a bottom-line move? Any business would do it if it could, or is there something more going on there?

Sterling: I think from the Dutch side, it did look like that. But we need to hear the Chinese side of it. I think this is a company that has half of its sales in China, and China is a very attractive growth market — the largest market for automotive chips, which is what this company specializes in. So, I think from Mr. Wing's perspective, it may well have looked like his long-term plan was to indeed move operations to China, but out of business considerations, I think. Maybe not necessarily nationalistic ones.

Ben-Achour: Now, the U.S. had also raised security concerns with the Netherlands. What were those concerns and how important were they?

Sterling: So, the company that owns Nexperia is a Chinese company called Wingtech, and they were added to the U.S. Entity List, which is companies that present a threat to national security, and the reason for that was they were kind of seen as a serial acquirer of "Western technology."

Ben-Achour: The Dutch government said recently that they'd kind of worked something out, the talks had been fruitful. Did one side of the other cave? How is this being resolved?

Sterling: I'm not overly optimistic, but it is true that each government has taken a small step back. I think the thing is that now there is a rift between the management of the production that's in Europe and the packaging that's in China, and those kind of two sides of the company have knives out. There's likely to be a court fight. Unless cooler heads prevail, this fight could go on for quite some time.

Ben-Achour: Where does this leave the world stage in terms of how countries relate to China?

Sterling: Although I would say China has maybe displayed its power quite effectively in this fight, I'm not so sure that it's a real victory for China, that they've kind of put fright into the carmakers of the world in this way. I don't think it was planned ahead of time. I do think it was a fight that just kind of blew up, but the long-term effects, yeah, may be negative, actually.