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It also forces China to develop its own competitor to ASML, which will eventually drive them out of the market.
You mean like Huawei in the 5G market?
Ultimately, ASML will lose either way.

ASML IP is already and will continue to be stolen by China, exporting machines to China just means that it will be stolen much faster.

To export or not hinges only on whether the problem matters from a short-term or longer term perspective. Either way, the Chinese will ultimately win.

Oh, another “China bad” shill.
What's your take then? Show me facts that I'm wrong.
Hmm, maybe explain how exporting a bunch and then stopping could possibly stop reverse engineering. These machines are also available from the second hand market. I mean, your conclusion isn't wrong, that ASML is going to lose much of the market share in the long run anyway just because it's always a threat. But still Ericsson and Nokia used to get a portion of the Chinese market until Europe turned. The businesses, whether telecoms or fabs would always prefer more competition among their suppliers, if nationalism hadn't got in the way.
Not only do they lose a huge customer, they'll likely face competition from China in the future. All this because the US is bullying them into an export ban that only benefits the US.
I think they should stand strong and also ban export to USA. Seems entirely reasonable to kneecap that side as well. Let's build stronger EU together.