China Has Threatened Trade With Some Countries After Feuds. They’re Calling ‘The Firm’ For Help

Washington — Business is adept at “the firm.”

The State Department’s eight-person team is leading Washington’s efforts to mitigate the economic consequences for China-targeted countries

It sprang from the scramble to assist Lithuania during a dispute with China over Taiwan two years ago. Today, “the firm” is assisting many governments in dealing with what diplomats call economic pressure emanating from Beijing.

Countries “knock on the door, they call,” Undersecretary of State Jose Fernandez said in a recent interview with The Associated Press. “We run a consulting firm that does not have to advertise for clients, as they come.”

China | AP news Image

China Has Threatened Trade With Some Countries After Feuds. They’re Calling ‘The Firm’ For Help

Led by State Department senior adviser Melanie Hart, the group assesses risks and creates responses for countries that are cut off or fear losing trade with global giant China. Fernandez said that since the group’s inception with Lithuania, more than a dozen countries have sought assistance from the Biden administration.

The attempt comes as Washington intensifies its campaign to counter China’s worldwide influence, as tensions between the rivals rise.

The Chinese Embassy in Washington rejected the claim that Beijing is exerting economic pressure on other countries, calling it “completely unfounded.” It claimed that the United States was bullying China economically by misusing export regulations, treating Chinese enterprises unfairly, and accusing Beijing of economic pressure.

According to Fernandez, China “uses this tactic repeatedly.” They believe intimidation works, which is why we engaged in it. It was time to put a stop to this.

For example, after a Norwegian jury awarded a Chinese dissident the Nobel Peace Prize in 2010, Beijing stopped purchasing salmon from Norway. Two years later, China blocked banana imports from the Philippines due to a territorial dispute in the South China Sea. In response to Australia’s request for a probe into the origins of the COVID-19 outbreak, Beijing raised duties on Australian barley and wines in 2020.

Then came Lithuania. Lithuanian enterprises’ cargo shipments to and from China were stalled in late 2021 and early 2022, and large European businesses warned them that Lithuanian-made auto parts would be prevented from entering the Chinese market.

That came when Lithuania allowed Taiwan’s de facto embassy in Vilnius to use the name Taiwan rather than Taipei, Taiwan’s capital city, as Beijing preferred. China considers the self-governed island to be part of its territory and has disputed Taiwan’s use.

Instead of caving in, the northern European country requested assistance. The United States and its allies stepped up.

China | AP News Image

China Has Threatened Trade With Some Countries After Feuds. They’re Calling ‘The Firm’ For Help

American diplomats sought new markets for Lithuanian products. The Export-Import Bank of Washington granted Vilnius $600 million in export credit, and the Pentagon inked a procurement arrangement with the country.

“The firm” persevered. The State Department serves as the first line of action and can cooperate with other U.S. agencies to access “every tool that the U.S. government has,” according to a department official who requested not to be named to disclose team details.

While it takes years to reorganize global supply chains to lessen dependency on nations like China, the team aims to provide a faster approach to alleviate a crisis, the official said, equating the team to ambulance services that “help you get past that scary emergency time.”

According to the official, the United States may strive to collaborate with partners to assist a country in quickly diverting agricultural exports to new markets, building more cold storage so products can reach further markets, or improving product quality to win admission into more markets.

The support is confidential, according to the person who declined to detail the instruments at the team’s disposal or identify the countries that have sought assistance.

Shay Wester, director of Asian economic affairs at the Asia Society Policy Institute, described it as “a significant and much-needed initiative.”

“China’s growing use of economic coercion to pressure countries over political disputes is a significant challenge that requires a concerted response,” said Wester, who co-authored an April paper on the subject.

China | Pixa Bay Image

China Has Threatened Trade With Some Countries After Feuds. They’re Calling ‘The Firm’ For Help

According to Wester, answers from other countries demonstrate a high demand for this type of support.

Lithuania organized a seminar on opposing economic pressure last month, and Foreign Minister Gabrielius Landsbergis stated that the action “is to crush the victims by forcing reversal and public renunciation of its policies.”

The Chinese Embassy’s spokesman, Liu Pengyu, stated that the problem with Lithuania was “political, not economic.” It was triggered by Lithuania’s poor faith actions, which harmed China’s interests, not by Chinese pressure on Lithuania.

Fernandez, who attended the summit, praised Lithuania for standing up to China. “Lithuania gave us the opportunity to prove that there were alternatives to the coercion,” he stated.

SOURCE – (AP)