US says China pressures states and firms to shun Taiwan

The United States moved to counter Chinese pressure on Taiwan ties on June 25, releasing letters dated June 16 from the State, Agriculture and Commerce departments to governors’ offices and to CEOs and other business leaders. The letters say Chinese embassies and consulates regularly contact local governments and private firms to discourage engagement with Taiwan and sometimes falsely claim Washington has accepted Beijing’s position on the island.

The governors’ letter frames the issue as a state-level problem, saying China’s diplomatic missions reach into local government offices to narrow Taiwan’s space for engagement. It urges continued cooperation with Taiwan on disaster preparedness and the resilience of critical infrastructure systems, signaling that the contest is no longer limited to Washington and Beijing but has moved into statehouses, ports, utilities and other local institutions.

The business letter makes the same case to corporate leaders, saying the departments often receive questions about how private companies can work with Taiwan. It presents Taiwan as a vital U.S. partner, a democratic success story and an important node in the global trade system, while encouraging firms to keep building trade and investment ties and to contact the State Department if Chinese officials try to pressure them.

The legal and economic backdrop is long established. The Taiwan Relations Act, enacted in 1979 after Washington switched diplomatic recognition from Taipei to Beijing, remains the basis for unofficial U.S.-Taiwan relations through the American Institute in Taiwan. A Congressional Research Service update says Taiwan is the United States’ fifth-largest merchandise trading partner, a position that helps explain why subnational ties matter to businesses, universities and trade officials as much as they do to defense planners.

The Biden-era push to deepen engagement continued in 2026. The State Department said Under Secretary for Economic Affairs Jacob Helberg led the sixth U.S.-Taiwan Economic Prosperity Partnership Dialogue on January 27, and the U.S. Trade Representative announced in February that Washington and Taipei had reached an Agreement on Reciprocal Trade under AIT and TECRO.

Taipei welcomed the letters and said Washington had clearly shown support against Beijing-directed interference in state-level ties. Beijing rejected that framing, with Foreign Ministry spokesman Guo Jiakun saying China opposes any form of official interaction between the United States and Taiwan and wants Washington to stop such exchanges.