FX.co ★ US and Taiwan to expand their economic partnership

According to Bloomberg, the United States and Taiwan intend to deepen economic ties. They are also planning to announce negotiations. "The talks will focus on enhancing economic cooperation and supply chain resiliency," Bloomberg noted.

Analysts contemplate that such cooperation will be a fresh challenge to Beijing. Earlier, China firmly opposed the US-Taiwan trade initiatives.

The new initiative may include areas of trade facilitation, supply-chain operations, and trade in agricultural products.

These issues are similar to the main provisions of the Indo-Pacific Economic Framework (IPEF) announced by Joe Biden during his visit to Tokyo. Washington expected Taiwan to join this group. However, some nations refused to have Taipei included because of fear of retribution from Beijing. "We are committed to deepening and enhancing the bilateral trade and economic relationship, and we instructed our teams to work over the course of the next couple of weeks on that deepening and enhancement," US Trade Representative Katherine Tai.

Currently, Taiwan's international status is unsettled. In 1949, it separated from China. However, Beijing did not recognize its independence. Interestingly, the US maintains its official relations with China while selling Taiwan military weapons according to the Taiwan Relations Act enacted in 1979.

For many years, Taiwan has insisted on holding negotiations with the United States on bilateral trade. Yet, the US required the country's leadership to fulfill several conditions, especially in the agricultural sector. Earlier, the Trump administration was reluctant to join a grouping with the island for fear of angering Beijing. At that time, the US and China were about to sign the first-phase trade deal. However, the situation has changed dramatically since then. Now, the US and Taiwan have mutual goals. Therefore, analysts are betting on the success in negotiations.