In a significant move that has raised tensions with China, the United States and Taiwan have signed a new trade deal aimed at strengthening economic relations between the two nations. Described as the most comprehensive trade agreement since 1979, the pact seeks to deepen the economic and trade relations between the U.S. and Taiwan, which China claims as part of its territory. The deal, known as the US-Taiwan Initiative on 21st Century Trade, focuses on streamlining customs checks, improving regulatory procedures, and establishing anti-corruption measures.
The signing of the agreement was attended by Deputy U.S. Trade Representative Sarah Bianchi and representatives from the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States. The U.S. Trade Representative press office expressed gratitude to Taiwan for their collaboration and expressed eagerness to engage in negotiations on additional trade areas outlined in the initiative’s mandate.
Despite not having official diplomatic relations, the U.S. and Taiwan maintain unofficial ties through the de facto U.S. embassy on the island, the American Institute in Taiwan. The United States has long been a staunch ally and major arms supplier to Taiwan, even after shifting diplomatic recognition to Beijing in 1979. Additionally, the U.S. is Taiwan’s second-largest trade partner.
China, however, strongly opposes any form of diplomatic relations between Taiwan and other governments, as it considers the island its own territory. Beijing issued a warning to Washington against signing any agreement that carries implications of sovereignty or an official nature with Taiwan. The Chinese foreign ministry spokesperson stated that the U.S. should not send wrong signals to “Taiwan independence forces” in the name of trade.
In recent years, China has escalated its threats and rhetoric towards Taiwan, conducting military drills near the island and attempting to sever its official ties with other countries. Despite these tensions, there has been rare bipartisan agreement within the United States on supporting Taiwan, with politicians from both sides meeting with Taiwanese leader Tsai Ing-wen. The U.S. announced its plans for trade negotiations in August as a show of support while China was conducting large-scale military exercises in response to a visit by then-Speaker of the House Nancy Pelosi to Taipei.
As tensions between China and Taiwan continue to simmer, the signing of the new trade deal between the United States and Taiwan is likely to further strain the already delicate relationship between Beijing and Washington. The implications of this agreement for regional stability and future diplomatic relations remain to be seen.