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Taiwan to counter China's economic coercion after tariff cut suspension

05/31/2024 10:54 PM
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CNA file photo
CNA file photo

Taipei, May 31 (CNA) Taiwan's government said Friday it is ready to address China's economic coercion, following a unilateral announcement by Beijing earlier in the day that it is expanding the suspension of preferential tariff rates on Taiwanese imports that had been part of a bilateral trade deal.

According to both the Ministry of Economic Affairs (MOEA) and the Office of Trade Negotiations (OTN) under the Executive Yuan, a raft of measures have been prepared to address the potential impact of Beijing's move and alleviate any adverse effects.

The announcement made by China's Ministry of Finance earlier Friday will affect a total of 134 export items, including base oils for lubricants, racing bicycles and textile products, manufactured in Taiwan.

The announcement came less than two weeks after President Lai Ching-te (賴清德) of the independence-leaning Democratic Progressive Party (DPP) took office on May 20. Beijing also launched two days of military exercises around Taiwan and its outlying islands last week.

China previously took aim at preferential tariffs under the Economic Cooperation Framework Agreement (ECFA) in December 2023, when it said it would terminate favorable import duties on 12 Taiwanese products, including propylene, paraxylene, and other petrochemicals, starting in 2024.

At that time, China said the measures were a response to Taiwan's ban on the import of Chinese goods, which it described as a "trade barrier."

In response to Beijing's latest measure on trade with Taiwan, the MOEA said it will facilitate industry upgrading by encouraging businesses to develop differentiated and high-value products.

The ministry also announced plans for greater market diversification, explaining that it will utilize cross-industry alliances to cluster sales and establish joint brands for small and medium-sized enterprises (SMEs) to expand into overseas markets.

According to the OTN, the risks and damages associated with the announced suspension of related goods are controllable.

The estimated amount of the affected exports to China was US$9.8 billion last year, accounting for about 2 percent of Taiwan's total global exports, MOEA data showed.

Both the OTN and the MOEA said China's move constitutes a serious violation of World Trade Organization regulations, urging Beijing to start negotiations with Taipei under related mechanisms.

(By Lai Yu-chen, Tseng Chi-yi, Teng Pei-ju and Lee Hsin-Yin)

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