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U.S. pursues sale of over $2 billion in weapons to Taiwan, sources say, in test for China

Reuters logo Reuters 6/6/2019 By Mike Stone and Patricia Zengerle

a train on a track with smoke coming out of it: FILE PHOTO: U.S. M1A2 "Abrams" tank fires during U.S. led joint military exercise "Noble Partner 2016" near Vaziani

FILE PHOTO: U.S. M1A2 "Abrams" tank fires during U.S. led joint military exercise "Noble Partner 2016" near Vaziani
© Reuters/David Mdzinarishvili

WASHINGTON (Reuters) - The United States is pursuing the sale of more than $2 billion worth of tanks and weapons to Taiwan, four people familiar with the negotiations said, in a move likely to anger China as a trade war between the world's two biggest economies escalates. 

An informal notification of the proposed sale has been sent to the U.S. Congress, the four sources said on condition of anonymity because they were not authorized to speak about the possible deal.

The potential sale included 108 General Dynamics Corp M1A2 Abrams tanks worth around $2 billion as well as anti-tank and anti-aircraft munitions, three of the sources said. Taiwan has been interested in refreshing its existing U.S.-made battle tank inventory, which includes M60 Patton tanks.

The United States is the main arms supplier to Taiwan, which China deems its own and has never renounced the use of force to bring the self-ruled island under its control.

Taiwanese President Tsai Ing-wen said in March the United States was responding positively to Taipei's requests for new arms sales to bolster its defenses in the face of pressure from China. The United States has no formal ties with Taiwan but is bound by law to help provide it with the means to defend itself.

China and the United States are engaged in a fierce trade war, with clashes over Taiwan and the South China Sea exacerbating tensions.

A spokesman for the State Department, which oversees foreign military sales, said the U.S. government does not comment on or confirm potential or pending arms sales or transfers before they have been formally notified to Congress.

The congressional notifications included a variety of anti-tank munitions, including 409 Raytheon Co and Lockheed Martin Corp-made Javelin missiles worth as much as $129 million, two of the sources said.

The notifications also included 1,240 TOW anti-tank missiles worth as much as $299 million, one of the sources said. There were also 250 stinger missiles worth as much as $223 million in the notification, the source said.

Stingers are often used in portable anti-aircraft weapons systems.

Taiwan's Defence Ministry confirmed it had requested those weapons and that the request was proceeding normally.

The U.S. commitment to providing Taiwan with the weapons to defend itself helps Taiwan's military to raise its combat abilities, consolidates the Taiwan-U.S. security partnership and ensures Taiwan's security, the ministry said in a statement.

There was no immediate response from Beijing.

U.S. President Donald Trump's administration rolled out a long-awaited overhaul of U.S. arms export policy in 2018 aimed at expanding sales to allies, saying it would bolster the American defense industry and create jobs at home.

Trump's trade adviser Peter Navarro was one of the administration's architects of that policy. Navarro, a China hawk, wrote about the possible sale of tanks to Taiwan in a March opinion column in the New York Times ahead of a presidential trip to the Lima, Ohio, plant where they are made.

At a low point, the U.S. Army had only one tank coming from the plant a month, General Dynamics CEO Phebe Novakovic said during an April conference call with investors, but said "we'll be rolling out 30 tanks a month by the end of this year," partly because of international orders.

The Pentagon announced last week it would sell 34 ScanEagle drones, made by Boeing Co, to the governments of Malaysia, Indonesia, the Philippines and Vietnam for $47 million.

The drones would afford greater intelligence-gathering capabilities, potentially curbing Chinese activity in the region.

China claims almost all of the strategic South China Sea and frequently lambastes the United States and its allies over naval operations near Chinese-occupied islands. Brunei, Indonesia, Malaysia, the Philippines, Taiwan and Vietnam all have competing claims.

China's Defence Minister Wei Fenghe warned the United States at the Shangri-La Dialogue in Singapore last weekend not to meddle in security disputes over Taiwan and the South China Sea.

Acting U.S. Defense Secretary Patrick Shanahan told the meeting that the United States would no longer "tiptoe" around China's behavior in Asia.

(Reporting by Mike Stone and Patricia Zengerle; Additional reporting by Yimou Lee in TAIPEI and Ben Blanchard in BEIJING; Editing by Mary Milliken, Chizu Nomiyama and Lisa Shumaker)

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