Senate Democrats are considering a bill to give tax breaks to Taiwanese companies, gauging interest in using a fast-track process to pass it into law.
The tax benefits for Taiwan were included as provisions in a bigger piece of tax legislation that passed the House by a wide margin earlier this year but failed to make it through the Senate over the summer.
An aide for the Senate Finance Committee told The Hill that the bill was being “hotlined,” which means it could be passed by unanimous consent if no senator objects to it beforehand.
There have been “no decisions made yet on a [vote by universal consent] but keeping all options open,” the aide said.
The Taiwanese provisions in the law that cleared the House include reducing the rate of withholding tax on dividends and royalties from U.S. companies for Taiwanese residents and raising the tax threshold for Taiwanese companies that are also set up in the U.S.
Certain types of wages for Taiwanese workers in the U.S. would also be made tax exempt, and rules could also be loosened for corporations to obtain Taiwanese residency status.
The move comes ahead of the anticipated changes in U.S. trade postures by the incoming Trump administration that could have geopolitical consequences, particularly for U.S. relations with China.
President-elect Trump has promised to raise tariffs on China, Canada and Mexico as soon as he gets into office, a move that could spark a trade war.
Trump has pledged especially stringent new restrictions on China, such as a 60-percent tariff on importers.
Taiwan, a U.S. ally that China considers part of its own territory, has been an economic flashpoint for these tensions, and China has carried out military drills in waters around the island.
The U.S. position on Taiwan has long been described as one of strategic ambiguity, a stance that Trump appeared to maintain over the weekend when he declined to say whether he would defend Taiwan in the event of a Chinese invasion.
“I never say, because I have to negotiate things, right?” Trump said on NBC’s “Meet the Press.”
“I’d prefer that they don’t do it. I have a very good relationship with President Xi [Jinping]. We have been communicating with each other,” Trump said in an interview published Sunday, referring to the president of the People’s Republic of China.
