China has decided to suspend tariff reductions on 12 Taiwan-origin products, including propylene and vinyl chloride.
According to China Central Television (CCTV) on the 21st, the Tariff Commission of the State Council announced the day before that it will suspend tariff reductions on 12 Taiwan-origin chemical products such as propylene, butadiene, isoprene, paraxylene, vinyl chloride, and dodecylbenzene, and impose tariffs according to current regulations. The effective date is January 1 of next year.
Under the Economic Cooperation Framework Agreement (ECFA) signed in 2010, China and Taiwan have applied tariff-free benefits to 267 Taiwan-origin and 539 China-origin products since January 2013. The Tariff Commission stated, "This measure is in response to Taiwan's unilateral discriminatory actions against imports of mainland Chinese products," and urged Taiwan to take effective measures such as withdrawing trade restrictions.
Earlier, on the 15th, China's Ministry of Commerce announced that it had concluded Taiwan's import restrictions on Chinese products constitute a "trade barrier." This was the result of an eight-month investigation reviewing whether Taiwan's import ban on over 2,000 Chinese products since April constitutes a trade barrier.
The Ministry of Commerce initially planned to complete the investigation by October 12 but extended the deadline to January 12 of next year, one day before Taiwan's presidential election, citing the complexity of the situation. The investigation found that 2,509 mainland products are banned from export to Taiwan, of which 1,423 were banned after Taiwan joined the World Trade Organization (WTO). The banned products include 1,077 agricultural products such as rice, flour, oil, fresh fruits, vegetables, dairy products, and eggs, as well as 1,432 industrial products including air conditioners and refrigerators.
The Ministry of Commerce stated that cross-strait trade has experienced "serious imbalance" over the past 20 years, with the mainland's trade deficit increasing by 397% from $31.5 billion (approximately 41.1 trillion KRW) in 2002 to $156.5 billion last year. According to Beijing Customs statistics, cross-strait trade volume through November this year dropped 16.3% year-on-year to $244.5 billion. During the same period, mainland China imported $182 billion worth of goods from Taiwan, down 16.9% from last year, and exports also decreased by 17.1% to $62.5 billion.
Some view China's recent measures as a pressure tactic considering Taiwan's presidential election scheduled for January 13. Taiwan authorities stated, "China's unilateral announcement of trade barrier results violates WTO mechanisms and norms and does not align with facts," adding, "We cannot accept this and urge China to immediately stop political manipulation." Lai Ching-te, the candidate from the independence-leaning ruling Democratic Progressive Party (DPP), also condemned the move as "an attempt to influence Taiwan's presidential election."
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