US, Taiwan pledge to help Lithuania tackle China’s “economic coercion”

The United States and Lithuania have agreed to cooperate on ways to counter what they have called “economic coercion” from China in a move that is likely to draw a strong rebuke from Beijing.

U.S. Trade Representative Katherine Tai told Lithuanian Foreign Minister Gabrielius Landsbergis on Wednesday that the Baltic nation has Washington’s backing in an appeal that took place amid a diplomatic dispute over the opening of ‘a representative office in Vilnius under its own name.

The two officials stressed that the United States and the European Union “as democratic market economies, share a number of fundamental values ​​and principles which we must defend at the international level”.

“The way to fight harassment isn’t to give up, it’s to work together,” Kolas Yotaka, spokesperson for the presidential office in Taipei, said in a tweet.

Lithuania faces unofficial trade hurdles and a deterioration in diplomatic relations with China after allowing the office to open in its capital, a move Beijing sees as a violation of its one-China principle. China has also recalled its ambassador, although it denies blocking the country’s exports. The EU raised the dispute with the World Trade Organization.

Earlier Wednesday, Taiwan pledged to create a $ 200 million fund to invest in Lithuania and open up markets at home in response to what it calls economic pressure from China.

Taiwan would use the fund to invest in semiconductors, lasers, biotechnology and research, Eric Huang, head of the representative office in Vilnius, said at a press conference. He will also send a team to assess Lithuania’s aspirations to develop a semiconductor industry, he added.

“It is time for us to help you with your difficulties,” Taiwanese Deputy Foreign Minister Harry Ho-jen Tseng said at the same press conference.

Lithuania has sought to forge closer economic ties with Taiwan and has expected to gain a foothold in Taiwan’s semiconductor industry since last year, when it exited the China-led 17 + 1 format, a group of EU states that China uses to engage and influence the bloc.

The Taiwan National Development Council and the Lithuanian Ministry of Economy have further discussed details of the investment fund, which will be financed by the Taiwan National Development Fund. An even larger fund for investments backed by Taiwan’s central bank is in the works, Huang said.

On the commercial side, Taiwan is also working to redirect some 120 containers of Lithuanian products that have been stopped at Chinese ports and to open up the island’s market to Lithuanian dairy and grain products, Huang said. A Taiwanese company also bought 20,400 bottles of Lithuanian rum that China refused to let into the country, according to the South China Morning Post.

“Taiwan is committed to speeding up the process for Lithuania as Lithuania faces such economic coercion unprecedented in the history of international trade,” Huang said.

The dispute sparked political tensions in Lithuania, where President Gitanas Nauseda on Tuesday criticized the government for opening up the office with Taiwan and said the use of the democratically ruled island’s name in the label was a mistake.

Nauseda later returned to the remarks, saying his stance on opening the office remained positive and unchanged, adding that he had never called it a mistake.

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