Aug 18, 2022 - World

U.S. and Taiwan to hold trade talks as tensions with Beijing rise

Taiwan President Tsai Ing-wen (C) visits a turboprop engine factory at a military base in Kaohsiung on September 26, 2020.

Taiwan President Tsai Ing-wen (center) visiting a turboprop engine factory at a military base in Kaohsiung. Photo: Sam Yeh/AFP via Getty Images

U.S. and Taiwan officials outlined plans on Thursday for formal negotiations on a sweeping trade treaty.

Why it matters: Washington's latest show of support for Taipei comes as Beijing threatens further action should the U.S. sell more arms to Taiwan, conduct naval activity near the self-governing island or send more officials there in the wake of Chinese military drills protesting House Speaker Nancy Pelosi visit earlier this month.

Worth noting: Daniel Kritenbrink, Washington's top envoy for East Asia, told reporters in a call on Thursday U.S. policy had not changed, "what has changed is Beijing's growing coercion."

  • "These actions are part of an intensified pressure campaign ... to intimidate and coerce Taiwan and undermine its resilience," he said.
  • Kritenbrink called Beijing's words and actions "deeply destabilizing," adding: "They risk miscalculation and threaten the peace and stability of the Taiwan Strait."

Our thought bubble, via Axios' Bethany Allen-Ebrahimian: Taiwanese government officials are concerned about the country's reliance on China for trade. In 2021, 42% of Taiwan's total exports went to China and Hong Kong, while 14% went to the U.S.

  • Beijing has previously used trade ties to exert political pressure on governments, as happened last year when it essentially banned imports of products made in Lithuania after Vilnius opened a Taiwan trade office.
  • Closer trade ties with the U.S. could help strengthen Taiwan's resilience if it were to face trade-related coercion from China.

What to expect: The first round of negotiations on the U.S.-Taiwan Initiative on 21st Century Trade is expected to take place early this fall, per a statement from the Office of the U.S. Trade Representative.

  • Deputy U.S. Trade Representative Sarah Bianchi said in the statement the talks "will deepen our trade and investment relationship, advance mutual trade priorities based on shared values, and promote innovation and inclusive economic growth for our workers and businesses."
  • Among the topics on the agenda for negotiations are agriculture, digital trade, labor environmental standards, "removing discriminatory barriers to trade," addressing "distortive practices of state-owned enterprises and non-market policies and practices," the Office of the U.S. Trade Representative said.

Go deeper: Taiwan lawmaker warns China could "invade" territorial waters

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