Taiwan Vows to Block China's "Backdoor" Trade with US

Deputy Minister Assures US Partnership Against Origin Laundering Amidst Free Trade Zone Concerns

Taipei, April 10 - Taiwan's government is actively working with the United States to prevent "origin laundering," according to the Deputy Foreign Affairs Minister. This commitment comes in response to concerns that proposed free trade zone plans could unintentionally allow China to circumvent U.S. tariffs.

Deputy Foreign Affairs Minister Chen Ming-chi (陳明祺) addressed the Legislative Yuan Foreign and National Defense Committee, providing an update on Taiwan's trade strategy following recent U.S. tariff announcements by President Donald Trump.

The session included representatives from various key ministries, including the Ministry of Foreign Affairs, the Ministry of Economic Affairs, and the Mainland Affairs Council, highlighting the cross-governmental importance of the issue.

The Deputy Minister's remarks directly addressed concerns surrounding a proposed "Offshore Free Trade Demonstration Zone." This zone is being considered under amendments to the Offshore Islands Development Act, initiated by the Kuomintang (KMT), Taiwan's largest opposition party.

These amendments, introduced by KMT lawmaker Chen Yu-jen (陳玉珍), would potentially permit the entry of Chinese individuals, companies, goods, and services into the zone under yet-to-be-defined regulations.

The intention behind the proposal, aiming to liberalize trade between China and Taiwan's Kinmen and Matsu Islands, is to facilitate cross-border commerce by "appropriately loosening relevant rules."

During the parliamentary session, lawmaker Puma Shen (沈伯洋) from the ruling Democratic Progressive Party (DPP) voiced concerns, warning that the amendments could "open a backdoor" for China to evade the substantial 128 percent tariffs levied on exports destined for the U.S.

DPP lawmaker Lin Chu-yin (林楚茵) echoed these concerns, pointing out a potential contradiction with efforts to build supply chains independent of China.

She referenced the 2019 Foreign Trade Act, which already strengthens origin verification measures and increases penalties, aiming to prevent Taiwan from being used as a transit point for "origin laundering" during the ongoing "U.S.-China trade war."

Deputy Foreign Affairs Minister Chen reaffirmed Taiwan's commitment to the U.S. on this front and assured the country would implement "comprehensive precautions" to address the issue.