Two US senators on Monday reintroduced the Taiwan Relations Reinforcement Act, which they said aims to reaffirm US policy to support Taiwan’s democracy and international engagement amid China’s increasing diplomatic and military aggression.
Republican Senator John Curtis and Democratic Senator Jeff Merkley introduced the bill for the fourth time, after previous attempts in 2020, 2021 and 2023 stalled, as it never progressed beyond the Senate Committee on Foreign Relations.
“Our alliance with Taiwan is one of the most strategically and morally significant partnerships America has in the Indo-Pacific, and we need to ensure our policies match our principles,” Curtis said in a joint statement with Merkley.
Photo: Bloomberg
“The Taiwan Relations Reinforcement Act will deepen our relationship with Taiwan by elevating the status of our top diplomat, incentivizing high-level cooperation and visits between our governments and combating Chinese Communist Party disinformation campaigns targeting Taiwan,” Curtis said.
If the act passes, it would change the status of the head of the American Institute in Taiwan to “representative,” whose appointment would have to be approved by the Senate, as is required for all US ambassadors.
It would also require the US president to establish an “interagency Taiwan task force,” comprising senior government officials who would contribute to annual reports to the US Congress on actions that should be taken to enhance Taiwan-US relations.
Another provision in the bill would require the US secretary of state to report to Congress on strategies to help counter “sharp power operations” by the Chinese government against Taiwan.
More broadly, the bill would also instruct the US government to support Taiwan’s participation in international organizations, advance negotiations on a bilateral trade deal, and invite Taiwanese counterparts to high-level multilateral and bilateral summits, military exercises and economic dialogues.
Meanwhile, three US representatives on Tuesday introduced a bill to protect US markets from the economic fallout of a potential Chinese invasion of Taiwan.
The draft “Fortifying US Markets from Chinese Military Aggression Act” was introduced by bipartisan US representatives Young Kim, Zach Nunn and Ritchie Torres.
Although the US has longstanding military plans in the event of a Chinese invasion of Taiwan, it lacks an “economic game plan,” Nunn said.
The amendment to the Financial Stability Act would create an advisory committee of 12 members, including market makers, asset managers and geopolitical experts, to create a coordinated response plan to safeguard the US economy.
The committee would work under the US Financial Stability Oversight Council and make recommendations to identify US market vulnerabilities, and ensure US capital markets are prepared for potential volatility and disruptions.
The council would issue annual public reports on the economic risks of a Taiwan conflict.
Bloomberg has estimated that a Chinese invasion of Taiwan would cause global GDP to fall US$10 trillion, double the contraction of the 2008 financial crisis or the COVID-19 pandemic.
As Taiwan produces nearly 90 percent of the world’s advanced semiconductors, economists have said that the US economy would undergo a short-term drop of up to 34 percent, a news release from Kim’s office said.
If the Chinese Communist Party were to take hold of Taiwan’s chip manufacturing capabilities, it would be “devastating, not just for global markets, but for Main Street Iowa businesses,” said Nunn, who represents Iowa’s third congressional district.
“The United States must be proactive in protecting our economy in case of an attack or blockade against Taiwan,” Kim said.
The bill would ensure that US financial markets are not “exploited to strengthen an authoritarian regime that threatens our values and our allies,” Torres said.
The bills must pass the US House and Senate before being signed into law by the US president.
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