China suspends tariff concessions on 134 items under Taiwan trade deal

HONG KONG (Reuters) -China will reinstate tariffs next month on 134 items it imports from Taiwan, after the Ministry of Finance said it would suspend concessions on the items under a trade deal because Taiwan had not reciprocated.

China, which claims democratically governed Taiwan as its own territory, has been ramping up its economic, political and military pressure against the island over the past four years.

China regards Taiwan President Lai Ching-te as a "separatist", holding war games around the island last week to express its anger at what it Beijing viewed as a provocative inauguration speech.

The Cross-Strait Economic Cooperation Framework Agreement (ECFA) between China and Taiwan was initially signed in 2010 and Taiwanese officials had previously told Reuters that China was likely to pressure Lai by ending some of the preferential trading terms within it.

"The Taiwan region has unilaterally adopted discriminatory measures such as prohibiting and restricting the export of mainland products, which violates the provisions of the (agreement)," China's finance ministry said.

The suspension of the tariff concessions is due to take place from June 15, the ministry said, and would apply to products imported from Taiwan including base oils - used to manufacture other products such as lubricants.

Taiwan's presidential office said the move was "classic Chinese economic coercion" which would not help improve relations across the Taiwan Strait.

"China should abandon political intervention in the market and distorting the normal operation of the global economy with economic coercion," it said in a statement.

Taiwan's China policy-making Mainland Affairs Council said the ECFA deal had benefited both sides' companies since it was signed.

"We call on the mainland to deal with differences through constructive dialogue that does not involve political prerequisites, and stop economic and trade pressure," it said.

In late December, China scrapped tariff cuts on some 12 chemical products it imported from Taiwan - moves described by Taipei officials as an attempt to interfere in January's election, which Lai won.

Taiwan's government rejects Beijing's sovereignty claims.

Chen Binhua, spokesperson for China's Taiwan Affairs Office, said Taiwan had unilaterally adopted discriminatory trade restrictions on the export of more than 2,500 mainland products.

This violated the ECFA's provisions on reducing or abolishing tariffs, he said.

(Reporting by Farah Master, Beijing newsroom and Ben Blanchard in Taipei; Editing by Lincoln Feast and David Holmes)