China Suspends Tariff Concessions on 134 Taiwan Items as Cross-Strait Tensions Continue to Rise

Taiwanese flags on a street lane as tourists walk past in Taiwan's Kinmen Islands on Aug. 11, 2022. (Sam Yeh/AFP via Getty Images)

The Chinese communist regime’s Ministry of Finance says that it will suspend tariff concessions on more than 130 items imported from Taiwan starting on June 15, and Taiwan’s Mainland Affairs Council is protesting the move.

The May 31 announcement comes 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 May 31, including lubricant base oils.

China and Taiwan signed the ECFA in 2010. China’s Ministry of Finance stated that the decision to halt tariff concessions was made because Taiwan hadn’t reciprocated under the trade deal.

Chiu Chui-Cheng, head of Taiwan’s Mainland Affairs Council (MAC), told 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 Chinese Communist Party (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 Beijing’s move is “unilateral,” which isn’t in line with World Trade Organization (WTO) regulations, and 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.

Kuo Chih-hui, Taiwan’s minister of economic affairs, said his 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, the agency said.

CCP’s Economic Coercion

Taiwanese President Lai Ching-te, who took office on May 20, said at his inauguration that the Republic of China (ROC, another name for the state ruling Taiwan) and the People’s Republic of China “are not subordinate to each other,” disputing Beijing’s claims of having sovereignty over the self-ruled democratic island nation.

Taiwan’s 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.” It also stated that the nation “currently exercises jurisdiction over Taiwan, Penghu, Kinmen, and Matsu, and has never been ruled by the PRC.”

The CCP, in response to Mr. Lai’s inaugural address, labeled the new president as a “separatist“ and accused his administration of spreading ”fallacies to promote Taiwanese independence and separatism.”

A member of Taiwan's military (front) takes part in routine exercises at the port of Liaoluo in Kinmen, Taiwan, on May 24, 2024. (I-hwa Cheng/AFP via Getty Images)

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

A spokesman for the CCP’s Taiwan Affairs Office said Beijing’s latest suspension of tariff cuts was a reaction to Taipei’s refusal to adhere to the “1992 Consensus,” in which both sides allegedly acknowledged the “one China” principle.

Taiwan’s presidential office said in a statement that the halt of the tariff cuts is an example of “classic Chinese economic coercion” and that the international community doesn’t welcome this kind of political interference 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 reads.

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 that pests had been found in previous shipments of the fruit. In 2021, CCP authorities suspended imports of pineapples from Taiwan after claiming that pests had been found.

Zhong Yuan contributed to this report.