Taiwan's DPP is to blame for mainland's halt in tariff cuts: observers

The Democratic Progressive Party (DPP) in the Chinese region of Taiwan is responsible for the mainland's decision to suspend tariff concessions on 134 items from the island, political experts and company executives say.

The Taiwan products that currently enjoy preferential tariff rates under the Economic Cooperation Framework Agreement (ECFA), a pact designed to lower business barriers between the mainland and Taiwan, will lose such status from June 15, according to the Customs Tariff Commission of the State Council.

The commission said the move, made in response to Taiwan's discriminatory and unilateral trade restrictions against the mainland, was an extension of its earlier decision to halt tariff cuts for other products since the DPP authorities had not reversed its breach of the ECFA.

Experts from Taiwan say the suspension will have a great impact on small- and medium-sized businesses in the region, for which the DPP should bear full responsibility.

These enterprises benefit from the ECFA's tariff concessions, which enable them to produce in Taiwan and export to the mainland, Teng Tai-Hsien, secretary general of the Straits Economic & Cultural Interchange Association, told China Media Group.

However, during his inauguration speech, Lai Ching-te advocated the "two states" theory, heightening cross-Straits tensions and putting at risk the lives, property, investments and operations of countless people in Taiwan, as well as tens of thousands of businesses, Teng said.

A crucial indicator of cross-Straits economic and trade relations, Taiwan observers say the ECFA's continued implementation is vital for the region's future development and economic stability.

The mainland has long been Taiwan's largest export destination and primary source of trade surplus, with the region's annual trade surplus hovering around $100 billion for the past few years. 

The ECFA is essentially the mainland's greatest concession to Taiwan, allowing all products from the region to enter the mainland market tariff-free, but if the DPP continues on this path, this special treatment will diminish, Chou Hsi-wei, vice chairman of Want Want China Times Group, told CMG.

"Both sides of the Taiwan Straits must unite, as we are inherently Chinese – by blood, by culture, by everything," Chou said. "Recognizing ourselves as Chinese and fostering peaceful and prosperous co-existence between the mainland and Taiwan is the most correct path forward."

As of the end of 2023, the total amount of tariff reductions and exemptions Taiwan has received from the mainland under the ECFA has exceeded $10.1 billion, which is ten times the amount the mainland has received from Taiwan.

The mainland's tariff concessions on 539 Taiwan items has also enhanced the competitiveness of Taiwan's agricultural, fishery, machinery, textile and chemical products in the international market, Zhang Hua, a researcher at the Taiwan Institute of the Chinese Academy of Social Sciences, told CMG.

Although the ECFA itself is an economic agreement, it has played a significant role and holds great value in promoting exchanges between compatriots on both sides of the Straits and in enhancing mutual understanding and comprehension, Zhang said.

Business representatives in Taiwan have called on the DPP to improve its relations with the mainland and respect the ECFA, which they say is under attack from the DPP.

By late 2023, The DPP authorities had unilaterally restricted the import of over 2,500 mainland products and designated 22 technologies as "core technologies under protection," strictly prohibiting related enterprises from investing in or cooperating with mainland companies.

Last year, Taiwan's economy had a growth rate of 1.31 percent, the lowest in nearly a decade, while its total exports for the year declined by nearly 10 percent. The continued downturn in various economic indices in the region is believed to be substantially influenced by the decrease in exports to the mainland.

The root cause for the mainland further suspending tariff cuts can be attributed to the cross-Straits tensions, particularly because the DPP rejects the 1992 Consensus and continues its "Taiwan independence" activities, Zhang said.

"We know that the basic premise and foundation for both the signing and implementation of the ECFA is that both sides of the Straits belong to one China," he said. "If this premise and foundation do not exist, the subsequent implementation will encounter significant difficulties and problems."