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China revokes Taiwan tariff concessions ahead of elections

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Taiwanese flags during the National Day celebration in Keelung, Taiwan, on Monday, Oct. 9, 2022.

I-Hwa Cheng | Bloomberg | Getty Images

China suspended tax concessions on 12 chemical compound imports from Taiwan in retaliation for what Beijing deems to be a violation of a trade agreement, just weeks ahead of key elections in the democratically-run island.

The Chinese Commerce Ministry last Friday extended its probe into Taiwan’s alleged restrictions on trade with the mainland to Jan. 12, just a day before the island’s presidential and parliamentary elections.

China has accused Taiwan of violating World Trade Organization rules and the terms of a 2010 trade accord between both parties.

“Taiwan has unilaterally adopted discriminatory bans, restrictions and other measures on the export of mainland products, violating the provisions of the Cross-Strait Economic Cooperation Framework Agreement,” China’s Finance Ministry said in a statement Thursday.

Chemical compounds that will now be subjected to tariffs from Jan. 1 include vinyl chloride, dodecylbenzene and primary forms of the ethylene propylene copolymer.

Beijing’s latest trade salvo also comes at a time when Taiwanese companies, including its mega semiconductor manufacturers, are diversifying their foot print in the mainland and reducing their economic reliance on China, in part due to Washington’s chip war against Beijing.

The timing of China’s probe is intentional and suggests its aims are more political than economic, said Lin Tze-luen, a spokesperson for Taiwan’s legislative Executive Yuan, at a press conference in Taipei after a regular cabinet meeting. He also said China’s investigation process was opaque.

The island’s Democratic Progressive Party-led government has often accused Beijing of vote interference either by military intimidation or by cooptation of Taiwan’s business elite due to their economic reliance on the world’s second-largest economy.

China has escalated military activity in the Taiwan Strait and nearby waters this year as Beijing presses its claims over the island it sees as its own.



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