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China Reacts Angrily to US-Taiwan Trade Initiative

Beijing warns the US to handle its dealings with Taiwan prudently so as not to encourage separatists after Washington says it will launch new trade talks with Taipei

Taiwan US ties
Taiwan officials hoped there would be an opportunity soon to seal a free- trade deal, adding that Taipei was also still striving to participate in IPEF. Photo: Reuters.


China has given an angry response to a new trade initiative between Taiwan and the United States, with the Commerce Ministry in Beijing saying on Thursday it “firmly opposes” the move.

Beijing has been upset by stepped up US engagement with the democratic government in Taiwan, which it regards as the most sensitive issue in ties with Washington.

“The United States should prudently handle trade and economic ties with Taiwan to avoid sending a wrong message to Taiwan separatists,” Commerce Ministry spokesman Gao Feng said.

Beijing opposes any official contact between Taiwan and other countries, including negotiating and signing any economic and trade agreements “with sovereign connotations and of an official nature”, Gao told an online briefing.


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US-Taiwan Initiative

The US said this week it plans to launch new trade talks with Taiwan even though it denied the island entry to its Indo-Pacific Economic Framework (IPEF), an economic partnership with 13 Asian countries designed to counter Beijing’s growing influence.

The United States and Taiwan announced the US-Taiwan Initiative on 21st Century Trade on Wednesday, days after the Biden administration excluded the Chinese-claimed island from the IPEF.

Taiwan has been cheered by the initiative, seeing it as another sign of support from Washington, and hopes it could pave the way for Taiwan eventually joining Biden’s IPEF, launched last week.

Taiwan Premier Su Tseng-chang told a cabinet meeting on Thursday the island “has an indispensable key position in the global supply chain”, according to a statement from his office.

This “made the US government realise that it must strengthen economic and trade links with our country in order to consolidate the resilience and security of the global supply chain”, Su said.

At a time of Russia’s attack against Ukraine and with the “dramatic changes” in the international situation, “the importance of Taiwan’s global strategic position has become clearer”, he said.

Taiwan is a major producer of semiconductors, global shortages of which have disrupted production of cars and some consumer electronics.


Parallel Initiative

The planned US-Taiwan Initiative in some ways parallels IPEF, which the US launched last week during a visit to Seoul and Tokyo.

Countries approached by Washington were reluctant to join a grouping with Taipei for fear of angering Beijing, a major trading partner.

A US official said the bilateral initiative would aim to “reach an agreement with high standard commitments that create inclusive and durable prosperity” on customs facilitation, fighting corruption, labour rights, digital trade and environmental standards.

The announcement on Taiwan talks came after a virtual meeting on Wednesday between deputy US trade representative Sarah Bianchi and Taiwan’s chief trade negotiator John Deng.


Taiwan Seeks Free-Trade Deal

Deng said they hoped there would be an opportunity soon to seal a free-trade deal, adding that Taipei was also still striving to participate in IPEF.

Like the IPEF, the initiative with Taiwan would not need congressional approval because it will not include market access requirements or reduced tariffs, a US official said.

“We think there’s a lot of robust areas that we can cover, that would really deepen our economic engagement, our economic ties, without dealing with market access issues. But of course, obviously, we’re not ruling anything out for the future,” the official said.

A second official said the new initiative added to other efforts to “highlight the US commitment to the region, specifically economically”.

In a separate development, Taiwan will on Thursday hold high-level trade talks with the European Union (EU) amid a concerted push by the bloc to boost its chip industry.

In February, the EU unveiled a European Chips Act, with the bloc mentioning Taiwan, home to the world’s largest contract chipmaker TSMC and other major semiconductor companies, as one of the “like-minded partners” Europe would like to work with.


  • Reuters, with additional editing by George Russell and Jim Pollard

This report was updated on June 2, 2022 with details on China’s response to the Taiwan Initiative.




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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.


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