Taiwan Hints at Economic Leverage After Papua New Guinea Closes Trade Office

Taiwan has halted spot purchases of natural gas from Papua New Guinea in response to Port Moresby's decision to close Taipei's trade office, a move seen as a warning that countries with ties to Taiwan could face consequences rather than full-scale economic coercion.

The decision was made after Papua New Guinea announced it would close the trade office on July 16, citing its 'One-China policy' and a desire to deepen trust and economic ties with Beijing. Taipei blamed Chinese pressure for the move, while the US expressed concern and Beijing praised the decision.

Taiwan's Foreign Minister Lin Chia-lung said the country was reviewing its broader economic exchanges with Papua New Guinea, including LNG imports of about 1.2 million metric tons a year, roughly one-third of PNG's LNG exports, while stressing that Taipei's agricultural and fisheries cooperation had also supported local development.

Experts say Taiwan's options remain constrained, but the move is part of a gradual shift toward more calibrated responses as Taiwan's informal diplomacy comes under sustained pressure. 'The LNG review is primarily a signal, but one embedded in a gradual shift toward more calibrated responses,' said Jozef Huljak, a PhD candidate in political science at Constantine the Philosopher University in Slovakia.