Taiwan, US hold second economic partnership dialogue

Taiwan and the United States discussed supply chain resilience, including on semiconductors, and how to respond to external economic coercion during an economic dialogue yesterday.

As the virtual US-Taiwan Economic Prosperity Partnership Dialogue was held, a US warship sailed through the Taiwan Strait, prompting China's foreign ministry to slam the move as a "deliberate attempt to disrupt and undermine regional peace and stability".

A statement from the US 7th Fleet called the passage a "routine" transit through the strait.

The transit by the Arleigh Burke-class guided missile destroyer USS Milius was the first since US President Joe Biden and his Chinese counterpart Xi Jinping held their virtual summit last week. Mr Xi had warned Mr Biden not to cross the red line that is Taiwan. Beijing sees Taiwan as a renegade province to be reunified, by force if necessary.

Taiwan's Economic Affairs Minister Wang Mei-hua and Minister of Science and Technology Tsung-Tsong Wu, as well as US Under Secretary of State for Economic Growth, Energy, and the Environment Jose Fernandez, led the five-hour dialogue.

Ms Wang told reporters that they discussed supply chain collaboration, including on semiconductors. Taiwan holds around 50 per cent of the world's computer chip foundry production capacity. "The semiconductor portion included the present short-term supply chain bottleneck problem. Even more important is the future long-term collaboration," she said.

They also discussed advancing research on semiconductors which experts believe will continue to be a priority in US-Taiwan collaborations.

Taiwan Institute of Economic Research researcher Arisa Liu said: "The main area Taiwan will be working on with the US will be in the semiconductor sector. The US is seeking to (gain access) to Taiwan's chips, which are in hot demand globally, and this will gradually expand to other fields." She counts 5G, artificial intelligence and automotive electronics among the next steps in boosting the economic relationship.

The issue of economic coercion also came up, said Ms Wang, with the delegations citing the case of Lithuania, and agreeing that no country should be the target of external economic coercion. Lithuania has come under economic pressure from Beijing after allowing Taiwan to open a de facto embassy in its capital Vilnius.

Taiwan's Ministry of Foreign Affairs said in a statement that both sides agreed to stand together against "external coercion". It added: "Taiwan and the US will be working... to strengthen ties to stand up against economic coercion that violates international trade rules."

The American Institute in Taiwan, the de facto US embassy, yesterday said there will be an inaugural government-level bilateral science and technology meeting next year, and a business advisory group will be set up.

This is the second US-Taiwan dialogue, after one in November last year.

China's state media Global Times on Monday said the meeting was "nothing but a kidnap of the island" and blasted the US for its "economic coercion of Taiwan's semiconductor sector". The dialogue should be seen "as a step towards further long-arm coercion from the US", it said, adding that the US had pressed automakers and chip companies, including Taiwan's semiconductor giant TSMC, to provide confidential data including sales and raw materials.