‘Resolutely oppose’: China lashes out after US, Taiwan sign landmark trade deal

China on Friday (Jan 16) said that it “resolutely opposes” the trade deal signed by the United States and Taiwan to reduce tariffs on Taiwanese goods and increase the island’s investment into the US. Meanwhile, Taipei has vowed to remain the world’s “most important” AI chipmaker after its government struck a deal with US President Donald Trump’s administration.

“China consistently and resolutely opposes any agreement... signed between countries with which it has diplomatic relations and the Taiwan region of China,” Foreign Ministry spokesman Guo Jiakun said, urging Washington to abide by the one-China principle.

Beijing claims Taiwan as part of its territory and has suggested using force to seize the island democracy.

Announcing the deal, the US Commerce Department said that the agreement “will drive a massive reshoring of America's semiconductor sector.” Under the deal, Washington will lower the tariffs on Taiwanese goods to 15 per cent, down from 20 per cent that Trump imposed as part of his “reciprocal” tariffs.

Taiwanese Premier Cho Jung-tai hailed the deal, calling it “delivering a well-executed home run” after months of negotiations. “These results underscore that the progress achieved so far has been hard-won,” Cho said.

Speaking to CNBC about the deal, US Commerce Secretary Howard Lutnick said, “The objective is to bring 40 per cent of Taiwan’s entire supply chain and production, to domestically bring it into America.” He added, “We’re going to bring it all over, so we become self-sufficient in the capacity of building semiconductors.”

Lutnick said Taiwanese chipmaking titan TSMC, which welcomed the deal between the US and Taiwan, has bought land and could expand in Arizona as part of the deal. “They just bought hundreds of acres adjacent to their property. Now I'm going to let them go through it with their board and give them time,” he said.

Taiwanese producers who invest in the United States will be favoured in future semiconductor duties, the US Commerce Department said.

A day earlier, US officials postponed imposing wider chip tariffs and instead announced a 25 per cent duty on certain semiconductors meant to be shipped abroad, a significant move allowing US chip giant Nvidia to sell AI chips to China.