Washington has taken recent actions that appear to be drawing it closer to Taiwan.
Beijing opposes other countries engaging with Taiwan and may retaliate by cracking down on Taipei.
The matter could further complicate U.S.-China ties, which are already strained by trade tensions, and potentially impact bilateral trade negotiations.
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Even if trade disagreements subside, the United States and China may have already found the next sticking point in their relationship.
President Donald Trump has warmed to Taiwan via a series of recent actions including arms sales, the appointment of National Security Advisor John Bolton — who has taken a strong pro-Taiwan stance in the past — and encouraging visits between U.S. and Taiwanese officials.
That has angered Beijing, which claims Taiwan under a policy known as “One China.” China opposes other countries pursuing ties with the self-ruled island.
The matter could affect trade negotiations between the two superpowers, which are threatening to tax one another’s imports.
“Beijing will put more pressure on U.S. companies in China to abide by the one-China policy — that is, not acknowledging Taiwan as a separate country — at the risk of their operations being shut down or fined …”
Trade friction and Taiwan are two separate issues, but if Washington continues to build closer ties to Taiwan, it could become difficult to de-link the two, analysts at political consultancy Eurasia Group, wrote in a Monday note.
“The U.S. administration’s new approach to Taiwan will substantially complicate U.S.-China ties and make it much harder to an agreement on trade,” the firm said.
“A debate in Beijing is currently ongoing whether the U.S. is hoping to use Taiwan as leverage on trade issues or whether this is a fundamentally different U.S. approach to Taiwan,” the note said.
The matter could also influence the situation in North Korea, because Washington still needs Beijing’s help reigning in the nuclear armed state.
Bolton and Taiwan
Washington has approved the license required for American manufacturers to sell technology to Taipei that would enable it to build its own submarines, Taiwan’s national news agency reported on Saturday.
Beijing opposes the move, demanding the U.S. “halt all forms of military links” with Taiwan, Reuters reported on Monday, citing an official statement.
Bolton, who started his new job this week, is widely expected to ramp up engagement with Taiwanese President Tsai Ing-wen’s government.