Taiwan to assist businesses after China mulls suspending more tariff cuts

Taipei, Jan. 11 (CNA) The Ministry of Economic Affairs (MOEA) said on Thursday that the government has a plan in place to assist local businesses after China warned it was considering further suspending the preferential tariff rates afforded to Taiwanese imports.

Vice Economics Minister Chen Chern-chyi (陳正祺) said at a press conference following a cabinet meeting that the government will assist Taiwanese businesses in diversifying their markets by helping them become more competitive, while also allowing industry players to use R&D subsidies to carry out product differentiation and strengthen market expansion.

With the problem of China's industrial overcapacity and the situation on the Red Sea, Taiwanese auto and textile industry players have already been diversifying to other markets, leading to the ratio of their exports to China gradually declining, the deputy minister noted.

Chen also accused China of using the bilateral trade agreement to exert pressure on Taiwan ahead of the country holding elections on Saturday.

The Economic Cooperation Framework Agreement (ECFA) is mutually beneficial and China should not engage in political manipulation or use cross-strait trade as a "weapon," Chen said.

His remarks came after China's Customs Tariff Commission said on Tuesday that it was studying measures to suspend tariff concessions on more Taiwanese imports such as agricultural, fishery, and machinery products, as well as auto parts and textiles.

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The move is being contemplated because the "Democratic Progressive Party authorities" have not taken effective measures to remove the island's trade restrictions following China's suspension of preferential tariffs on 12 Taiwanese products, the commission said.

The commission is referring to Taiwan's ban on imports of over 2,400 Chinese goods, which in December China described as a "trade barrier."

Hsiao Chen-jung (蕭振榮), chief of staff of the Office of Trade Negotiations under the Executive Yuan, said cross-strait trade issues should be handled per World Trade Organization mechanisms, seeing as both are WTO members.

Hsiao also criticized China for adopting unilateral measures to terminate some of the ECFA terms, which violates WTO norms.

Also on Thursday, Taiwan's Straits Exchange Foundation (SEF) urged China to cease its "coercion and threats," as repeated attempts at interfering in Taiwan's elections would only be counterproductive.

Tsai Meng-chun (蔡孟君), deputy secretary-general of the SEF, said Taiwan was willing to hold negotiations with China, but added that China adopting unilateral measures would only hurt cross-strait trade.