Tariff cuts on 12 Taiwan imports to be suspended

Beijing announced on Thursday that tariff reductions on several products from the Taiwan region will be suspended in response to the discriminatory trade restrictions the island has imposed on products from the Chinese mainland.

Starting Jan 1, 12 chemical products from Taiwan, including propylene and paraxylene, will no longer be subject to the preferential tax rates stipulated in the Economic Cooperation Framework Agreement, the Customs Tariff Commission of the State Council said in a statement.

The agreement, which was signed in 2010 between the two sides based on the 1992 Consensus that embodies the one-China principle, is a comprehensive cross-Strait economic pact intended to lower trade barriers.

As some of Taiwan's trade measures, such as bans and restrictions on mainland products, have breached the agreement, the commission has decided to suspend the tax reductions on the aforementioned products, the statement said.

The decision came after the Ministry of Commerce, following an eight-month probe, announced last week that Taiwan has imposed restrictions on the imports of numerous goods from the mainland.

Taiwan expanded the list of its import restrictions from 2,455 items to 2,509 since the mainland announced the investigation in April.

The trade imbalance between the two sides of the Strait has significantly expanded over the years. The mainland's trade deficit with Taiwan has grown 397 percent, from $31.49 billion in 2002 to $156.5 billion in 2022, data from the ministry showed.

Zhu Fenglian, a spokeswoman for the Taiwan Affairs Office of the State Council, said on Thursday that Taiwan's Democratic Progressive Party authorities have been attacking the agreement and have failed to lift discriminatory trade restrictions against mainland products since coming into office.

Instead, they have intensified rule modifications and created obstacles that hinder economic exchanges and cooperation between the two sides, leading to the result of suspension of some tariff reductions, she said.

"Such a problem could have been properly resolved through cross-Strait consultations," Zhu said, noting that the DPP's refusal to recognize the 1992 Consensus and its "pro-independence" stance have damaged the political foundation for cross-Strait negotiations, harming people on both sides of the Strait.

It is hoped that cross-Strait relations can return to peaceful development, so that both sides can engage in negotiations and resolve economic and trade issues based on the 1992 Consensus, she added.

Shu Jueting, a spokeswoman for the Ministry of Commerce, said on Thursday that the DPP authorities have been continuously obstructing cross-Strait cooperation under various pretexts, which will limit Taiwan's economic development space and harm the interests of its people.

Tang Yonghong, a professor of Taiwan studies at Xiamen University, said the suspension measure was taken by the mainland because the DPP authorities have not only denied the 1992 Consensus, the basis for the preferential policies, but also colluded with foreign forces to harm the development of the motherland.

"It is just an initial step, and it is possible for the mainland to suspend more preferential policies in the future if the island authorities do not make corrections," Tang said. "If completely suspended, Taiwan's exports to the mainland will lose competitiveness, which will lead to industry relocation, economic recession, lower wages and even job losses."

The suspension measure will help Taiwan society realize that the 1992 Consensus is closely linked to Taiwan's security, its economic development and the well-being of its people, Tang said, adding that otherwise, some people might push for "Taiwan independence" and engage in secessionist activities even while enjoying the benefits from the mainland.

Rejecting the 1992 Consensus and engaging in activities that harm national core interests will inevitably bring harm to those engaging in these activities, Tang said.

Liu Zizheng contributed to this story.