Beijing will be suspending preferential tariffs on 134 items from Taiwan starting from 15 June due to the island’s failure to lift its trade restrictions on mainland Chinese products, the Customs Tariff Commission announced in a statement today.
The products that will be affected include machinery, tools, plastics and industrial chemicals.
The government department noted that “the Taiwan Region has unilaterally implemented discriminatory and restrictive measures on mainland Chinese products, which goes against the guidelines of the Economic Cooperation Framework Agreement (ECFA).” Beijing began taking action last December by halting tariff cuts on 12 Taiwanese petrochemical goods that came under the agreement.
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The ECFA preferential tariffs extend to 539 products from the island and 267 mainland Chinese products. Signed in 2010, the agreement was intended to draw the two closer together, with Taiwan receiving an economic boost of US$13.8 billion.
Mainland China’s current decision to cut some of its preferential tariffs coincides with the recent assumption of office by the island’s leader, William Lai, who is considered to be a separatist by Beijing. Shortly after he took up his role, the mainland military conducted two days of drills that virtually encircled Taiwan.
Despite the tensions, official data indicates that the mainland and Hong Kong were Taiwan’s largest trade markets last year, accounting for roughly 35 percent of the island’s exports and around 20 percent of its imports.
