ISSUE 303                                                                                          July 14, 2025
Opaque U.S.-Taiwan Negotiations Keep Public in the Dark
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The opaque nature of the U.S.-Taiwan tariff negotiations has unsettled businesses, with concerns that excessively high rates could severely impact exports and accelerate industrial relocation.
Featured Editorial

Why Taiwan Businesses Can't Trust Government's Negotiations with the U.S. 

 

The United States has recently announced its reciprocal tariff rates for various countries, including Japan and South Korea, while the outcome of U.S.-China tariff talks is largely settled. Compared to the transparent and public negotiation focus seen with China, Japan, and South Korea—where businesses can clearly identify the key issues behind the imposed rates—Taiwan’s talks with the United States over the past three months have been conducted in complete secrecy. If the final reciprocal tariff rates fall short of expectations, then Taiwanese businesses may be left lamenting a senseless loss.

Featured Opinion
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The Han Kuang Exercise No. 41 simulated urban warfare but was criticized for being unrealistic, with the People's Liberation Army (PLA) mocking it as "mere posturing." 

A Mere Show: Han Kuang Military Exercises Miss the Point 

 

The Han Kuang No. 41 live-fire military exercise is underway from July 9 to 18, featuring a continuous 10-day, 9-night operation. According to the Armed Forces, the exercise scenario gradually escalates from gray zone incursions to full-scale combat, designed to test the armed forces’ ability to transition from peacetime to wartime and to prepare for deployment. However, shortly after the exercise began, a spokesman of mainland China’s Ministry of National Defense dismissed it as “a bluff and self-deception aimed at dragging Taiwanese civilians onto the separatist war wagon.” So, is Han Kuang No. 41 truly just a bluff as the People’s Liberation Army (PLA) claims?

Featured Opinion
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Democratic Progressive Party (DPP) whip Ker Chien-ming stated that Article 100 of the Criminal Code could be used to prosecute Kuomintang (KMT) legislators. Scholars criticized this as an attempt to weaponize the law against political opponents and a betrayal of democratic principles.

DPP Plan to Silence Dissent with Criminal Code Betrays Democratic Values

 

Democratic Progressive Party (DPP) whip Legislator Ker Chien-ming recently made a chilling statement that even if Kuomintang (KMT) legislators are recalled, criminal charges still apply. One may escape the death penalty but cannot escape punishment during life, added Ker. The legislator even mentioned invoking Artile 100 of the Criminal Code. Although some later tried to soften his remarks, many online and in the media applauded him. Those defending Legislator Ker either claim it was a slip of the tongue or insist that the DPP would never backslide into authoritarian practices. 

This Week in Taiwan
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Mainland China has fully activated the M503 connecting flight route. The Taiwan Affairs Office of the mainland's State Councill claims that it benefits safety and cross-strait exchanges, while the Mainland Affairs Council criticized the move as an unilateral change to the status quo which increases risk.

July 6:

Mainland China's Civil Aviation Administration announced the activation of the "W121" feeder route connected to the M503 air route, marking the full operation of all three feeder routes. The Taiwan Affairs Office (TAO) of the mainland's State Council stated that the move aims to ease air traffic, ensure flight safety, and benefit cross-strait relations. The Mainland Affairs Council (MAC) criticized the unilateral change to the status quo and escalation of regional tensions, calling for prompt negotiations.

 

July 7:

The New Taiwan dollar's appreciation shows no signs of slowing. In response, the Central Bank introduced a "T+1" measure targeting foreign investors who speculate on forex without investing in equities. The rule mandates that foreign investors settle foreign exchange transactions on the day following stock sales, aiming to curb parking funds in currency speculation. This triggered pushback from foreign investors, who accused the Central Bank of implementing "quasi-foreign exchange control."

 

July 8:

The Ministry of Finance announced that June exports reached US$53.3 billion, a monthly record high. Exports to the United States totaled US$17.2 billion, an increase of 90.9 percent, setting a new monthly record. Moreover, Taiwan recorded a US$55.2 billion trade surplus with the United States for the first half of the year, making the United States its largest trade surplus partner, surpassing mainland China and Hong Kong for the first time since records began.

 

July 9:

Reciprocal tariff negotiation with the United States is nearing conclusion. Late at night, President Lai Ching-te held a video call with Taiwan's negotiating team in Washington, instructing officials to safeguard national and industrial interests. However, photos released by the Office of the President show that only national security officials were present, with no finance, agriculture, or national development officials, prompting public debate.


July 9:

The Armed Forces launched the 10-day, nine-night Han Huang Exercise No. 41, conducting around-the-clock drills. The scenario begins with gray-zone harassment and escalates into full-scale combat, marking the first simulated People's Liberation Army (PLA) amphibious landing. In addition to validating brigade-level reserve mobilization, a planned urban resilience drill in the three major western cities was partially canceled in Tainan due to typhoon damage.

 

July 9:

Mainland China's Ministry of Commerce announced the addition of eight Taiwanese entities, including the Aerospace Industrial Development Corporation and the National Chung-Shan Institute of Science and Technology, to its export control list for military-civil dual-use items. The TAO described the move as a stern warning against Taiwan independence, while the MAC asserted that Taiwan would continue to build an autonomous defense industry.

 

July 9:

As the major recall vote approaches, Democratic Progressive Party (DPP) whip Legislator Ker Chien-ming warned Kuomintang (KMT) lawmakers of possible consequences, saying that "Article 100 of the Criminal Code will deal with you." Opposition parties accused the DPP of openly directing judicial crackdowns, invoking the crime of sedition to target the opposition. Critics claim that the phrase "Democratic Progressive" belongs in the trash. The DPP quickly tried to contain the backlash, emphasizing that it will not revert to authoritarian practices.

 

July 9:

Typhoon Danas struck southern Taiwan with Level 16 gusts, severely damaging offshore solar platforms in Pingtung, causing large black structures to drift ashore. In Chiayi, hundreds of floating solar panels in a flood retention basin were overturned by strong winds, with debris scattered across nearby roads and water surfaces. Residents expressed concern about water source contamination; confidence in Taiwan's fish-solar coexistence projects took a serious hit.

Published since 2019 by the Fair Winds Foundation and Association of Foreign Relations, Taiwan Weekly provides in-depth report and analysis of the major issues facing Taiwan.

The conclusions and recommendations of any Taiwan Weekly article are solely those of its author(s) and do not reflect the views of the institutions that publish the newsletter.


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