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Taiwan could figure in to US-China talks

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Trade disputes unresolved before Xi-Trump meeting

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US is Taiwan's most important international backer

By Andrea Shalal and Jarrett Renshaw

WASHINGTON, Oct 20 (Reuters) - U.S. President Donald

Trump said on Monday he expects to reach a fair trade deal with

Chinese President Xi Jinping and downplayed risks of a clash

over the issue of Taiwan, even as his top trade negotiator

accused Beijing of engaging in "economic coercion."

Trump suggested to reporters that China had no designs on

invading Taiwan but acknowledged he expected the issue to be on

the agenda at a planned meeting with Xi on the sidelines of an

economic conference in South Korea next week.

Trade tensions between the U.S. and China, the world's two

biggest economies, have lingered. Disputes over tariffs,

technology and market access remain unresolved days before the

meeting. Trump spoke at the start of a meeting with Australian

Prime Minister Anthony Albanese where the two signed a critical

minerals agreement aimed at countering China.

TRUMP SAYS CHINA DOESN'T WANT TO INVADE TAIWAN

Trump's comments on Taiwan reflect one of the most sensitive

issues in U.S.-China relations. Beijing has repeatedly pressed

Washington to alter the language it uses when discussing its

position on Taiwanese independence.

Trump pledged to accelerate deliveries of nuclear submarines

to Australia and was asked if U.S. actions in the waters of the

Indo-Pacific were a sufficient deterrent to keep Xi from

invading Taiwan.

"China doesn't want to do that," Trump said, before boasting

about the size and strength of the U.S. military.

He added: "We have the best of everything and nobody is

going to mess with that ... I think we'll end up with a very

strong trade deal. Both of us will be happy."

But U.S. Trade Representative Jamieson Greer took a tougher

line later in the day, warning the U.S. would respond with

unspecified action to what he called a "broader pattern of

economic coercion" by Beijing against firms that make strategic

investments in critical U.S. industries.

Officials in South Korea said last week that China's

sanctions on U.S.-linked units of shipbuilder Hanwha Ocean

threatened to impact ambitious plans for

shipbuilding cooperation between Seoul and Washington.

"Attempts at intimidation will not stop the United States

from rebuilding its shipbuilding base and responding

appropriately to China's targeting of critical industrial

sectors for dominance," Greer said in a statement.

TRUMP SAYS TAIWAN COULD COME UP IN CHINA TALKS

Asked by a reporter whether the U.S. might adjust its

position on Taiwan independence in order to reach a trade deal

with China, Trump said, "We're going to be talking about a lot

of things. I assume that will be one of them, but I'm not going

to talk about it now."

Speaking in Taipei, Wang Liang-yu, head of the Taiwan

foreign ministry's North American Affairs Department, said

Taiwan-U.S. communication is "quite smooth", and that since

Trump took office, the U.S. has repeatedly reiterated its

support for Taiwan.

"The foreign ministry will continue to closely pay attention

to relevant developments and will maintain communication with

the U.S. side to ensure Taiwan-U.S. relations continue to deepen

in a stable way and that our interests can really be

guaranteed," she added.

Beijing has ramped up a campaign of military and

diplomatic pressure on democratically governed Taiwan, which it

views as its own territory. China has never renounced the

potential use of force to bring Taiwan under its control.

The United States is Taiwan's most important international

backer and arms supplier despite the lack of formal diplomatic

ties. Beijing regularly denounces any shows of support for

Taipei from Washington.

(Reporting by Andrea Shalal in Washington and Jarrett Renshaw

in Philadelphia; Additional reporting by Ben Blanchard in

Taipei; Editing by Trevor Hunnicutt, Matthew Lewis and Lincoln

Feast.)