U.S.-Taiwan trade talks amplify corporate alert

2 minute read

Taiwan President Tsai Ing-wen speaks at a meeting with U.S. Senator Ed Markey and other members of the U.S. congressional delegation (not pictured) at the presidential office in Taipei, Taiwan in this handout image released August 15, 2022. Taiwan Presidential Office/Handout via REUTERS

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WASHINGTON, Aug 18 (Reuters Breakingviews) - The reasons for companies to worry about Taiwan keep piling up. The United States on Wednesday said it would kick off trade talks with the self-ruled island this autumn. With part of the aim to address market distortions by China, negotiations signal tensions will worsen.

The decision amounts to another poke at Beijing, just weeks after U.S. House Speaker Nancy Pelosi’s rare visit to Taiwan, which sparked unprecedented military drills in the area by China read more . It should have companies in the region intensifying their own strategic drills.

Increasing strains eventually could affect production, exports and travel. There were $9 billion of foreign direct investment projects in the first half of 2022, 275% more than a year earlier, according to Taiwan’s Ministry of Economic Affairs. Contingency plans for various scenarios would be useful.

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The war in Ukraine is a cautionary tale of being caught flat-footed. Any possible conflict over Taiwan is probably far off, and there are good reasons for restraint read more . The latest trade talks, however, provide one more reason to be prepared. (By Gina Chon)

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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Editing by Jeffrey Goldfarb and Oliver Taslic

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