While adding to the US-China tussle story, the Financial Times (FT) came out with the news saying, “The Biden administration is preparing to issue guidelines that would make it easier for US diplomats to meet Taiwanese officials by adopting some of the changes introduced by Donald Trump.”
The early Tuesday news also states that such a move will provoke China while mentioning that the original restrictions on meetings were introduced after the US switched diplomatic recognition from Taipei to Beijing in 1979. However, in January, Mike Pompeo, then secretary of state, rescinded many of the restrictions after Congress in December passed the Taiwan Assurance Act, which mandated a review within 180 days.
It’s worth mentioning that a different story suggests the US and Japan are likely to take note of Taiwan during their recent negotiations.
FX implications
Given the escalation in the Western drive to battle China over multiple issues, recently backed by Japan, risk-off mood should gain momentum. However, vaccine optimism and stimulus hopes seem to keep the markets mostly dry ahead of this week’s US employment report.
Read: S&P 500 Futures reverses early Asia gains amid mixed clues, strong US Treasury yields
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