👀 Ones to watch: The MOST undervalued stocks to buy right nowSee Undervalued Stocks

China suspends tariff concessions on 134 items under Taiwan trade deal

Published 05/30/2024, 10:04 PM
Updated 05/31/2024, 04:40 AM
© Reuters. FILE PHOTO: Chinese and Taiwanese printed flags are seen in this illustration taken, April 28, 2022. Picture taken April 28, 2022.  REUTERS/Dado Ruvic/Illustration/File Photo

HONG KONG (Reuters) -China will reinstate tariffs next month on 134 items it imports from Taiwan, after the Ministry of Finance said it would suspend concessions on the items under a trade deal because Taiwan had not reciprocated.

China, which claims democratically governed Taiwan as its own territory, has been ramping up its economic, political and military pressure against the island over the past four years.

China regards Taiwan President Lai Ching-te as a "separatist", holding war games around the island last week to express its anger at what it Beijing viewed as a provocative inauguration speech.

The Cross-Strait Economic Cooperation Framework Agreement (ECFA) between China and Taiwan was initially signed in 2010 and Taiwanese officials had previously told Reuters that China was likely to pressure Lai by ending some of the preferential trading terms within it.

"The Taiwan region has unilaterally adopted discriminatory measures such as prohibiting and restricting the export of mainland products, which violates the provisions of the (agreement)," China's finance ministry said.

The suspension of the tariff concessions is due to take place from June 15, the ministry said, and would apply to products imported from Taiwan including base oils - used to manufacture other products such as lubricants.

Taiwan's presidential office said the move was "classic Chinese economic coercion" which would not help improve relations across the Taiwan Strait.

"China should abandon political intervention in the market and distorting the normal operation of the global economy with economic coercion," it said in a statement.

Taiwan's China policy-making Mainland Affairs Council said the ECFA deal had benefited both sides' companies since it was signed.

"We call on the mainland to deal with differences through constructive dialogue that does not involve political prerequisites, and stop economic and trade pressure," it said.

In late December, China scrapped tariff cuts on some 12 chemical products it imported from Taiwan - moves described by Taipei officials as an attempt to interfere in January's election, which Lai won.

Taiwan's government rejects Beijing's sovereignty claims.

© Reuters. FILE PHOTO: Chinese and Taiwanese printed flags are seen in this illustration taken, April 28, 2022. Picture taken April 28, 2022.  REUTERS/Dado Ruvic/Illustration/File Photo

Chen Binhua, spokesperson for China's Taiwan Affairs Office, said Taiwan had unilaterally adopted discriminatory trade restrictions on the export of more than 2,500 mainland products.

This violated the ECFA's provisions on reducing or abolishing tariffs, he said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.