Beijing to impose sanctions on U.S. firms involved in $2.2B Taiwan arms deal


An Abrams tank

The U.S. arms deal with Taiwan includes 108 M1A2T Abrams tanks. | Mark Wilson/Getty Images

This story is being published as part of a content partnership with the South China Morning Post. It originally appeared on scmp.com on July 12, 2019.

Beijing said on Friday it will issue sanctions against the U.S. companies involved in the latest arms sale to Taiwan, as tensions between China and the United States continue to rise.

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The foreign ministry said in a brief statement that the move by Washington had violated China’s territorial sovereignty and national security.

“To protect our national interest, China will impose sanctions on the U.S. companies involved in the arms sale,” ministry spokesperson Geng Shuang was quoted as saying.

Beijing has made repeated calls to the U.S. for it to stop engaging in military exchanges with Taiwan, with the latest remarks coming after Washington on Monday approved the sale of U.S. $2.2 billion worth of military equipment to the self-ruled island.

China’s Foreign Minister Wang Yi said on a visit to Budapest on Friday that the U.S. should stop “playing with fire”.
“We urge the U.S. to fully recognize the gravity of the Taiwan question … [and] not to play with fire on the question of Taiwan,” he told a news conference.

The deal will do little to ease the tension between China and the U.S., which are embroiled in multiple disputes on a range of issues, from trade and technology to Beijing’s militarization of the South China Sea.

Beijing last used the threat of sanctions to punish U.S. firms in 2015, after Washington approved a U.S. $1.83 billion arms deal with Taiwan, saying that its determination to protect its territorial integrity was unshakeable.

The latest deal includes 108 M1A2T Abrams tanks, 250 Stinger missiles and related equipment.

The Defense Security Cooperation Agency, which handles U.S. foreign arms sales, said the principal missile contractor would be Raytheon Missile Systems, and the prime contractor for the tanks would be General Dynamics Land Systems.

The deal is by far the most substantial since President Donald Trump took office in January 2017. Previous sales, announced in June 2017, September 2018 and April 2019, included training and maintenance/logistics support, as well as torpedoes, anti-radiation missiles and missile components. They were worth U.S. $500 million, U.S. $330 million and U.S. $1.42 billion respectively.

Beijing’s sanctions announcement came after Taiwan’s President Tsai Ing-wen made a public appearance in New York on Thursday during a stopover en route to the Caribbean nations of Haiti, Saint Kitts and Nevis, St Vincent and the Grenadines, and St Lucia.

At a reception at the Taipei Economic and Cultural Representative Office — the first of its kind ever hosted by a Taiwanese president — Tsai said the self-ruled island would not bend to pressure from Beijing to give up its ambition of joining the United Nations.

Her remarks were criticized by the Taiwan Affairs Office in Beijing, whose spokesperson, Ma Xiaoguang, accused her of using external powers to challenge the “one China” principle and threaten the stability of the Taiwan Strait.

Beijing considers Taiwan a wayward province awaiting reunification with the mainland fold, by force if necessary. It has become increasingly upset by American arms and strategic support for the island in countering Beijing’s military expansion since Trump became president.

Additional reporting by Reuters

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