China Ends Tariff Breaks on Some Taiwan Imports, Pressuring Lai

(Bloomberg) — China said it is ending some tariff breaks agreed to under a trade deal with Taiwan, blaming the new leader of the democratically run island for undermining the pact.

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The Chinese Ministry of Finance said Friday that starting June 15 it would halt concessions on 134 items listed under the 2010 Economic Cooperation Framework Agreement. The goods include lithium-ion batteries and golf products.

The move would impact 10.2% of the $95.7 billion worth of Taiwan’s cross-strait shipments last year, said Yin Ying-ju, a statistics official in the Finance Ministry in Taipei. She added that “it might have a big impact on individual companies.”

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China — which has pledged to bring Taiwan under its control someday, by force if necessary — has ramped up pressure on Taiwan President Lai Ching-te since he took office last week. It tore into his inaugural address because he said that neither side of the strait was subordinate to the other.

Beijing also held major military exercises around the island, sharply criticized US Secretary of State Antony Blinken for congratulating Lai and hit US defense companies with symbolic sanctions.

China and Taiwan signed the ECFA when the leader of the island was Ma Ying-jeou, whose Kuomintang political group favors eventual unification. Late last year, Beijing said it would end tariff concessions on 12 chemical imports from Taiwan, saying the island put in place “discriminatory bans” on Chinese shipments.

Chen Binhua, a spokesperson for the office in Beijing that handles Taiwan affairs, accused Lai of sabotaging the trade deal with his “separatist” stance.

“There will be no peace for pursuing ‘Taiwan independence,’ nor will there be development,” Chen said in a statement on Friday.

The Taiwanese government department that handles ties with China condemned ending the tariff concessions.

“China will have to take full responsibility for letting the cross-strait trading relationship to drift away,” Mainland Affairs Council head Chiu Chui-cheng told lawmakers.

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