Taiwan protests China’s tariff suspension on 134 products, including base oils
The State Council Tariff Commission of China has announced the suspension of tariff concessions on 134 tariff items, including lubricant base oils, under the Cross-Strait Economic Cooperation Framework Agreement (ECFA). This decision, effective from June 15, 2024, comes in response to what China describes as Taiwan’s continued discriminatory prohibitions and restrictions on the export of mainland products.
Taiwan’s government has issued a strong protest against China’s decision to extend the suspension of preferential tariff rates on 134 Taiwanese products. Chiu Chui-Cheng, head of Taiwan’s Mainland Affairs Council (MAC), criticised the decision as unilateral and not in compliance with World Trade Organization (WTO) regulations. He described it as a political maneuver intended to exert pressure on Taiwan. This extension follows a similar action in December 2023, when China removed favorable import duties on 12 Taiwanese products, including petrochemicals.
Background and details
Unilateral Measures by Taiwan: The decision follows Taiwan’s unilateral actions, which China claims violate the provisions of the ECFA. Despite previous measures, including the issuance of Tariff Commission Announcement No. 9 of 2023, Taiwan has not taken effective steps to lift the trade restrictions imposed on products from the mainland.
Scope of Suspension: The suspension affects a broad range of products as outlined in the appendix of the announcement. The termination of agreed tariff rates under the ECFA for these products underscores China’s response to the ongoing trade tensions between the two sides.
Economic Impact: The suspension of tariff concessions is expected to impact various industries reliant on these imports, particularly those involving lubricant base oils and other critical goods listed in the affected tariff items.
Official Announcement: For more detailed information, the full announcement and the list of affected products can be found on the Ministry of Finance’s official website.
This move reflects the escalating economic and trade disputes between China and Taiwan, highlighting the complexities and challenges in cross-strait relations. The global business community will be closely monitoring the developments and potential repercussions on regional trade dynamics.
In addition to tariff suspensions, China has proposed measures targeting Taiwan’s Matsu Islands, aiming to enhance economic integration and exert political influence. These proposals include increasing shipping and investment between Fuzhou and the Matsu Islands, offering various incentives to Matsu residents, and establishing an industrial cooperation zone.
Taiwanese authorities view these actions as threats to national security, noting that China aims to use economic ties to coerce local governments and populations into accepting Chinese administration. The broader strategy appears to include eventual annexation efforts starting with Taiwan’s outlying territories and potentially extending to the main island.
