The US has announced that they will begin formal trade negotiations with Taiwan, weeks after a controversial visit by US House Speaker Nancy Pelosi.
The first round of talks is expected to begin in "early fall", said the Office of US Trade Representative.
Their discussion will include talks on trade facilitation, digital trade and anti-corruption standards.
Relations between the US and China have been increasingly tense following Ms Pelosi's visit.
The US-Taiwan Initiative on 21st Century Trade was first unveiled in June, with both sides now saying they had "reached consensus on the negotiating mandate".
"We plan to pursue an ambitious schedule.... that will help build a fairer, more prosperous and resilient 21st century economy," said Deputy United States Trade Representative Sarah Bianchi in a statement.
Trade between the US and Taiwan was worth nearly $106bn (£88bn) in 2020.
The announcement comes as China launched its largest-ever military exercises around Taiwan after Ms Pelosi's visit earlier in August.
Under the "One China policy", the US recognises and has formal ties with China rather than the island of Taiwan but maintains a "robust unofficial" relationship with Taiwan, including continued arms sales to the island so that it can defend itself.
Beijing sees the self-governing island as its own, renegade territory that must be united with the mainland.
However, Taiwan is a self-ruled island that sees itself as distinct from the mainland.
Seperately on Thursday, top US diplomat for East Asia Daniel Kritenbrink said Beijing's "growing coercion....threatens the peace and stability of the Taiwan Strait".
"We will continue to take calm, but resolute steps to uphold peace and stability in the face of Beijing's ongoing efforts to undermine it and to support Taiwan in line with our long-standing policy," he said.
China and Taiwan: The basics
- Why do China and Taiwan have poor relations? China sees the self-ruled island as a part of its territory and insists it should be unified with the mainland, by force if necessary
- How is Taiwan governed? The island has its own constitution, democratically elected leaders, and about 300,000 active troops in its armed forces
- Who recognises Taiwan? Only a few countries recognise Taiwan. Most recognise the Chinese government in Beijing instead. The US has no official ties with Taiwan but does have a law which requires it to provide the island with the means to defend itself