US lawmakers propose fund for Taiwan’s ‘friends’ facing pressure from Beijing

A new bipartisan bill would direct US assistance to countries that face economic backlash from China for attempting to forge ties with Taiwan.

The proposal, which leaders of the House select committee on China plan to introduce on Friday, aims to encourage other countries to strengthen bonds with Taiwan and to aid those who have done so and who are facing economic pressure from Beijing. In recent years, countries like Nauru have severed ties with Taiwan in favor of China.

The measure would authorize $120 million over three years for a new Taiwan Allies Fund, according to a copy of the bill’s text shared with Semafor ahead of its introduction.

China “has weaponized trade and commercial ties to punish countries seeking closer unofficial ties with Taiwan,” a one page summary reads. It cites Lithuania, whose exports China blocked after Lithuania allowed Taiwan to open a de facto embassy there back in 2021.

“Taiwan’s global network of friends is critical to supporting democracy, advancing global development, and deterring PRC aggression,” the summary states.

The legislation would allocate $40 million annually for three consecutive years for the fund to support countries that have official or strong unofficial relations with Taiwan, are the recipients of “coercion or pressure” by China, and “lack the economic or political capability to effectively respond” to that economic pressure. Only nations who receive less than $5 million in other development aid would qualify, and it would fall to the State Department and the US Agency for International Development to dole out the money.

The bill’s sponsors are Reps. John Moolenaar, R-Mich, who replaced Mike Gallagher as the new chair of the House select committee on China earlier this year, and Raja Krishnamoorthi, the top Democrat on the panel. In addition, it will be sponsored by Reps. Gregory Meeks, D-N.Y., Ami Bera, D-Calif., Gerry Connolly, D-Va., and Andy Barr, R-Ky, according to a Krishnamoorthi aide. Meeks is the top Democrat on the House Foreign Affairs Committee.

The proposal comes less than two weeks before a new president, Lai Ching-te, is inaugurated in Taiwan. Tensions have flared between the US and China in the region in recent days, after a US warship passed through the Taiwan Strait. China has increased its military presence near the island.

The US government maintains unofficial ties with Taiwan and supporting the self-governing island has become a popular cause in Washington as sentiment sours towards Beijing. A steady stream of US lawmakers have visited the island in recent years and Taiwan’s outgoing president, Tsai Ing-wen, met with then-House Speaker Kevin McCarthy and other members in California last year, a visit that enraged China, which claims Taiwan as its own territory. The foreign aid package recently signed into law by President Biden also included billions of dollars to counter threats from China to Taiwan and allies in Asia.

Following Nauru’s decision to sever diplomatic ties with Taiwan in January following Lai’s election, the Chinese foreign ministry said “there is but one China in the world” and “Taiwan is an inalienable part of China’s territory.”