Taipei: Taiwan's deputy foreign minister stated Thursday that the nation is dedicated to collaborating with the United States to forestall "origin laundering." This announcement was made in response to worries about free trade zone plans, which some legislators fear could provide a "backdoor" for China to circumvent U.S. tariffs.
According to Focus Taiwan, Deputy Foreign Affairs Minister Chen Ming-chi addressed these concerns during a session of the Legislative Yuan Foreign and National Defense Committee. During this session, top officials discussed Taiwan's trade strategy following U.S. President Donald Trump's recent tariffs on global trading partners. The session was attended by various ministries, including Taiwan's Ministry of Foreign Affairs, the Ministry of Economic Affairs, the Mainland Affairs Council, and others involved in trade negotiations and economic affairs.
The deputy foreign minister's comments were aimed at addressing apprehensions about the potential establishment of an "Offshore Free Trade Demonstration Zone." This project, proposed by Taiwan's largest opposition party, the Kuomintang (KMT), involves amendments to the Offshore Islands Development Act. KMT lawmaker Chen Yu-jen introduced these amendments, which would permit the entry of Chinese people, companies, goods, and services into the zone, under regulations yet to be determined.
The proposal aims to liberalize trade between China and Taiwan's outlying Kinmen and Matsu Islands, facilitating cross-border commerce and "appropriately loosening relevant rules." However, during the session, Democratic Progressive Party (DPP) lawmaker Puma Shen cautioned that these amendments could allow China to bypass the 128 percent tariffs imposed on exports to the United States.
Further highlighting the potential risks, DPP lawmaker Lin Chu-yin pointed out that the proposal contradicts ongoing efforts to establish supply chains independent of China. She referenced the 2019 Foreign Trade Act, which strengthens origin verification and penalties to prevent Taiwan from becoming a hub for origin laundering amid the "U.S.-China trade war."
Deputy Foreign Affairs Minister Chen emphasized that the United States remains highly vigilant on this issue, and Taiwan is committed to implementing "comprehensive precautions" to address these concerns.