Biden Administration May Restart U.S.-Taiwan Trade Talks as U.S.-China Trade Differences Widen

China’s Ministry of Commerce said Thursday (June 10) that senior U.S. and Chinese business officials spoke by phone and agreed to promote healthy trade and cooperation over their differences. This is the latest high-level exchange in a situation where the trade dispute between the two sides continues and even expands. On the other hand, U.S. Trade Representative David Deitch may speak with Taiwan’s trade representative as early as today. This means that the Biden administration will move forward to restart the shelved U.S.-Taiwan trade talks.

Chinese Commerce Minister Wang Wentao said after speaking with U.S. Commerce Secretary Gina Raimondo that the two sides recognize the importance of commercial exchanges and will keep communication open.

The two sides agreed to promote the healthy development of trade and investment and to deal with differences in a pragmatic and cooperative manner, the Chinese Commerce Department said.

The U.S. Department of Commerce has not yet released news of the call between the U.S. and Chinese commerce ministers.

Earlier this month, Chinese Vice Premier Liu He had a phone conversation with U.S. Treasury Secretary Janet Yellen, and in late May, Liu had a similar “frank” exchange of views with U.S. Trade Representative Dickey.

The world’s two largest economies are at odds on various fronts, with the U.S. Senate this week approving a package of legislation aimed at improving the United States’ ability to compete with China on technology, drawing strong criticism from Beijing.

On Wednesday, however, President Biden withdrew a series of Trump-era executive orders. The executive orders sought to ban new downloads of TikTok, the short-form video app popular in the United States, and WeChat, the social networking app most commonly used in China and among Chinese in the U.S. TikTok’s parent company is Beijing-based ByteDance. WeChat, on the other hand, is a social app developed by Shenzhen-based Chinese handicraft giant Tencent.

The new executive order issued by President Biden calls for a broad review of applications controlled by foreign adversaries to determine whether they pose a security threat to the United States.

The new order does not specifically target any company, but has the potential to crack down more broadly on Chinese-owned apps by mandating a review of all software applications with potential ties to countries such as China.

The White House said the Commerce Department is authorized to begin the review immediately. And the Commerce Department was ordered to review the security issues posed by these and other applications.

In an editorial Thursday, the official China Daily newspaper said in an editorial that U.S. technology legislation “is indeed deployed for the Cold War. That argument is a far cry from the positive rhetoric of frank exchanges, pragmatic cooperation and the promotion of healthy trade and investment that the same official media reported in phone conversations between Dyche, Raimondo and Liu He and Wang Wentao.

The Biden administration will also restart U.S.-Taiwan trade and investment talks that were suspended during the Trump administration. The Wall Street Journal report, citing sources familiar with the matter, said U.S. Trade Representative Dickey plans to speak with Taiwan trade representatives as early as Thursday (June 10).

Secretary of State Anthony Blinken disclosed the plans for the talks before a House committee Monday (June 7).

Negotiations for the trade and investment framework agreement date back to the 1990s. Robert Lighthizer, the Trump administration’s trade representative, sees Taiwan as a mercantilist country that blocks U.S. imports. He is also focused on negotiations with Beijing on negotiating a broad trade deal.

Taiwan supporters in Congress want the U.S. to go farther and sign a bilateral trade agreement with Taipei. A senior Biden administration official said the Biden administration has not yet made a decision on the matter.

Such “if we resume dialogue, the first thing is to catch up,” the senior administration official said. “Our economic relationship with Taiwan continues to deepen.”

Taiwan is a major source of semiconductors for the United States, which imported $7 billion in chips and $20 billion in other computer and telecommunications equipment last year for a total of $60 billion in imports, twice as much as U.S. exports to Taiwan, according to the Wall Street Journal, citing data from the Labor Department’s Census Bureau.

The Biden administration has made protecting the supply chain for key technologies a priority, especially given China’s prominence in manufacturing, and the new trade agreement will help Taiwan gain more support at a time when it is facing economic and other pressures from Beijing.

A spokesman for the Chinese Embassy in Washington told the Wall Street Journal that the U.S. should “stop all forms of official interactions and contacts with Taiwan and stop enhancing relations with the region in any substantive way,” regarding the U.S.-Taiwan trade talks. The spokesman urged Washington to abide by the decades-old agreement with Beijing.