Preliminary Trade Agreement Between U.S., Taiwan Garners Approval from Senate
The Senate has approved a preliminary trade agreement with Taiwan, clearing its path to President Biden's desk for final approval. This legislation was a result of negotiations between the Biden administration and Taipei.
The bill outlines transparency and cooperation terms for future negotiations and could potentially pave the way for stronger tax ties between the U.S. and the island nation. Though the bill had previously been blocked in the Senate, it managed to secure passage due to its bipartisan support.
The bill was initially introduced back in June by Sen. Ron Wyden (D-Ore.), Finance ranking member Mike Crapo (R-Idaho), House Ways and Means Chair Jason Smith (R-Mo.), and ranking member Richard Neal (D-Mass.). These legislators believe that this bill sends a strong message about the willingness of Congress to enhance its trade relationship with Taiwan, subsequently asserting Congress's constitutional authority over trade agreements.
The leaders also drafted a proposed legislation earlier this month that promises treaty-like benefits for businesses seeking cross-border investment opportunities via the tax code.
Of note: This tax bill will aim to lower withholding taxes on dividends, interest, and royalties associated with cross-border investments, making it accessible for smaller businesses to engage in these types of investments by alleviating related barriers. Thus, encouraging increased economic cooperation and mutual financial benefits between the two nations.
