American-Taiwan Trade Talks Producing Little — Even in Shadow of War

Yet transactions covering arms are taking place separately.

AP/Daniel Ceng
Taiwanese soldiers after a preparedness enhancement drill simulating defense against military intrusions by China, at Kaohsiung City, Taiwan, January 11, 2023. AP/Daniel Ceng

One would think that a country facing a threat from the likes of Communist China might be more forthcoming than Taiwan is being in trade talks with America, on whom it depends for its defense. After four days of talks, though, high-level American and Taiwan negotiators at Taipei appear to have little momentum to show beyond generalities. 

The American side says it reached “consensus in a number of areas and pledged to maintain an ambitious negotiating schedule in the months ahead to continue this momentum.” It is difficult, though, to see much other than an inability to reach an agreement on free trade. 

That would have called for almost eliminating tariffs on key products, including semiconductors, Taiwan’s leading manufactured product. “It doesn’t seem as if anything was done in the sense of being concrete,” a senior research fellow at the Mercatus Center of George Mason University in Virginia, Weifeng Zhong, says. “It was not as positive as one might hope.”

One thing the two sides did not discuss was the billions of dollars in arms America is selling to Taiwan quite separately from the talks between trade negotiators. Most recently the Department of State has pieced together $1.1 billion in military aid, more than half for a surveillance radar program.

That would tell Taiwan defenders what the Communist Chinese would be doing as soon as their planes took off on exercises intended to instill fears of an invasion. Also included in the package are missiles for firing at targets in the air, at sea, and on land. Some analysts say that combination would make Taiwan into a “porcupine.”

That is, it would make it bristling with stingers that far larger, more powerful Chinese forces would have difficulty penetrating — and prefer to avoid. “There is debate about what sort of weapons,” Mr. Zhong says. “Some might say they serve a political purpose.” Political and economic purposes are indeed factors in the equation.

Increasingly, American semiconductor manufacturers are sending their designs for Taiwan manufacturers to produce. “The U.S. is shifting from China to Taiwan,” Mr. Zhong says. Partly owing to business with American firms, Taiwan ranks ahead of both China and South Korea as the world’s largest semiconductor manufacturer.

One factor is China’s campaign of intimidation against Taiwan in which China’s party boss, Xi Jinping, periodically sends scores of fighter planes beyond the Air Defense Identification Line between Taiwan and the mainland. Chinese planes and warships have also intruded into Taiwan’s territorial waters.

Mr. Zhong is not convinced that Mr. Xi would refrain from attacking Taiwan for fear of losing the tremendous profits that China makes from its enormous trade surplus with America. Nor, he believes, would Mr. Xi  necessarily be deterred by the prospect of losing trade with Taiwan or Taiwan investment in the Chinese mainland.

“Even though attacking Taiwan is economically not feasible,” he says, “politically it might serve some purpose of distracting attention from problems at home.” In the meantime, Taiwan’s trade office  put out an official statement that indicated the trade talks had gone nowhere.

“More transparent measures will be taken in the future,” it said. “ We will build up multiple bilateral platforms to promote bilateral cooperation and share the successful experiences and difficulties.”


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