Amid Rising Cross-Strait Tensions, China Halts Tariff Concessions on 134 Taiwan Products

The Chinese communist regime’s Ministry of Finance announced on May 31 that it would suspend tariff concessions on 134 items imported from Taiwan starting on June 15. Taiwan’s Mainland Affairs Council protested Beijing’s move.

It comes one day after Taiwan’s law enforcement officials accused eight Chinese companies, including Chinese Apple supplier Luxshare Precision Industry, of illegally operating in Taiwan and attempting to poach Taiwanese technology talent on May 30.

The Tariff Commission of the Chinese communist regime’s State Council publicized the second batch of suspended tariff concessions for 134 items from Taiwan under the Cross-Strait Economic Cooperation Framework Agreement (ECFA) on Friday, including lubricant base oils.

China and Taiwan signed the ECFA in 2010. China’s Ministry of Finance said the halt of tariff concessions is because Taiwan had not reciprocated under the trade deal.

Chiu Chui-Cheng, head of Taiwan’s Mainland Affairs Council (MAC), said at the Legislature on May 31 that Taiwan “strongly protested and expressed its dissatisfaction with” Beijing’s decision to further suspend tariff concessions on 134 Taiwanese products under the ECFA.

The CCP opened a trade barrier investigation against Taiwan in December 2023, stating that it would suspend tariff cuts under ECFA on 12 Taiwanese products, including propylene, paraxylene, and other petrochemicals, starting in 2024.

Mr. Chiu said that Beijing’s move is “unilateral” which is not in line with the World Trade Organization’s (WTO) regulations. It was a “political maneuver” aimed at “exerting pressure on Taiwan.”

“It will only distort the original mutually beneficial development direction of cross-strait economic and trade relations … and make the economic and trade relations between the two sides drift further apart and decouple,” he said.

Minister of Economic Affairs of the Republic of China (Taiwan) Kuo Chih-hui said that the ministry will fully communicate with businesses that will be affected and assist them in finding new markets.

The Office of Economic and Trade Negotiations of the Executive Yuan of Taiwan stated that both sides of the Taiwan Strait are members of the WTO and that cross-strait trade disputes and differences should be handled and resolved under WTO rules. The CCP should immediately stop its irrational economic coercion against Taiwan and adhere to WTO norms, according to the agency.

CCP’s Economic Coercion

Beijing’s latest move comes amid the rising tension over the Taiwan Strait.

Taiwan’s President Lai Ching-te took office on May 20. Mr. Lai stated at his inauguration, that the “Republic of China (ROC) [Taiwan] and the People’s Republic of China (PRC) [China] are not subordinate to each other”, disputing Beijing’s sovereignty claim over the self-ruled democratic island nation.

The MAC previously clarified in a statement that “the ROC is a sovereign and independent nation, which was established 38 years prior to the founding of PRC and has stood firm for the past 110 years. The ROC currently exercises jurisdiction over Taiwan, Penghu, Kinmen, and Matsu, and has never been ruled by the PRC.”

The CCP reacted strongly toward Mr. Lai’s inauguration speech, saying it was provocative and calling Mr. Lai a “separatist.”

The communist regime’s Taiwan Affairs Office criticized Mr. Lai’s administration, accusing it of spreading “fallacies to promote Taiwanese independence and separatism, and incited division and economic decoupling across the Taiwan Strait.”

The CCP also conducted two days of military drills around Taiwan and its waters after Mr. Lai’s inauguration speech.

The CCP’s Taiwan Affairs Office spokesman, Chen Binhua, stated that Beijing’s suspension of tariff cuts this time is due to Taipei’s refusal to adhere to the “1992 consensus,” in which both sides acknowledged the one-China principle.

Taiwan’s presidential office said in a statement that the halt of the tariff cuts is “classic Chinese economic coercion”, and the international community does not welcome this kind of use of political power to interfere in global trade.

“China should abandon political intervention in the market and distorting the normal operation of the global economy with economic coercion,” the statement read.

The MAC called on Beijing “to deal with differences through constructive dialogue that does not involve political prerequisites, and stop economic and trade pressure.”

Beijing has imposed trade restrictions on products from Taiwan in recent years amid increasing tensions across the Taiwan Strait. Last year, China banned imports of mangoes from Taiwan, citing “reasonable biosecurity precautions” and claiming pests had been found in previous shipments of the fruit. In 2021, the CCP authorities suspended imports of pineapples from Taiwan after claiming pests had been found.

Zhong Yuan contributed to this report.