Prime Minister Inga Ruginienė conceded lately that the government made an error in 2021 by letting Taiwan open an office in Vilnius under its own name. The office remains open under the contentious title as Vilnius tries to quietly fix its standing with Beijing.
The cost of the policy became evident as exports to China dropped to near nothing by 2022, falling by 91.4% in December 2021 from a year earlier according to Chinese government customs data.
The dairy sector felt the loss and the Port of Klaipeda struggled as freight moved to other hubs. After Chinese customs erased Lithuania from the system, trade almost disappeared.
Beijing even got European companies to stop using Lithuanian parts by threatening to block any product containing them. The tactic left the state alone among its partners.
The Fragility of International Backing
Ruginienė lamented that the world did not fully back the plan. Other European governments keep their offices under more cautious names to maintain a functional standing with Beijing.
The support offered by allies appeared mainly administrative as businesses used only a tiny portion of the relief funds.
The WTO legal case faded away after the EU dropped it in late 2025, saying trade had resumed, and left local companies to manage the economic fallout without a safety net.
The Reality of Geographic Power
Lithuania tried to lead Europe by leaving a China-led trade group in 2021 but the action overlooked the leverage Beijing held through global manufacturing.
Trade was growing fast before the fallout and the growth gave Beijing massive leverage over the economy. After the pressure started, companies moved their factories to other states to avoid being blocked.
The laser industry was hit especially hard by the political fallout because nearly 30% of its exports went to the Chinese market.
The Boundaries of the Small State
Small states sometimes take on roles that larger powers avoid. Lithuania is now rethinking the naming of the office after President Gitanas Nausėda called the choice an error.
Vilnius wants to keep its tech connection with Taiwan as it tries to restore a basic standing with China.
Foreign Minister Kestutis Budrys said that Beijing must take the first step to fix the connection. For now, the office stays exactly as it was.
Lessons in Power
Lithuania’s defence of political principles met the reality of how global trade is actually organised. The Prime Minister now favours a strategy rooted in a collective European interest.
The connection with Taiwan brought real gains in drones and tech but it also brought a bill that the government is only now paying for.
The office in Vilnius stands as a reminder that strong words require the material strength to sustain them over the long haul. Economic pressure works as a country has no other options and its allies lack the stomach for a long fight.
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