BEIJING >> The U.S. government will hold talks with Taiwan on a wide-ranging trade treaty in a sign of support for the self-ruled island democracy China claims as its own territory.

The announcement Thursday comes after Beijing held military drills that included firing missiles into the sea to intimidate Taiwan following this month’s visit by U.S. House Speaker Nancy Pelosi, the highest-level member of the U.S. government to visit Taiwan in 25 years.

Meanwhile, Taiwan’s military held a drill Thursday with missiles and cannon simulating a response to a Chinese missile attack.

President Joe Biden’s coordinator for the Indo-Pacific region, Kurt Campbell, said last week trade talks would “deepen our ties with Taiwan” but stressed policy wasn’t changing. The United States has no diplomatic relations with Taiwan, its ninth-largest trading partner, but maintains extensive informal ties.

The U.S. Trade Representative’s announcement made no mention of tension with Beijing but said “formal negotiations” would develop trade and regulatory ties, a step that would entail closer official interaction.

Taiwan and China split in 1949 after a civil war and have no official relations but are bound by billions of dollars of trade and investment. The island never has been part of the People’s Republic of China, but the ruling Communist Party says it is obliged to unite with the mainland, by force if necessary.

Being allowed to export more to the United States might help Taiwan blunt China’s efforts to use its status as the island’s biggest trading partner as political leverage. The mainland blocked imports of Taiwanese citrus and other food in retaliation for Pelosi’s Aug. 2 visit.

Chinese President Xi Jinping’s government had no immediate reaction to the announcement.

U.S.-Chinese relations are at their lowest level in decades amid disputes over trade, security, technology and Beijing’s treatment of Muslim minorities and Hong Kong.

The USTR said negotiations would be conducted under the auspices of Washington’s unofficial embassy, the American Institute in Taiwan.

Xi’s government says official contact with Taiwan such as Pelosi’s one-day visit might embolden the island to try to make its decades-old de facto independence permanent, a step Beijing says would lead to war.

Washington says it takes no position on the status of China and Taiwan but wants their dispute settled peacefully. The U.S. government is obligated by federal law to see that the island has the means to defend itself.

“We will continue to take calm and resolute steps to uphold peace and stability in the face of Beijing’s ongoing efforts to undermine it, and to support Taiwan,” Campbell said during a conference call last Friday.

China takes more than twice as much of Taiwan’s exports as the United States, its No. 2 foreign market. Taiwan’s government says its companies have invested almost $200 billion in the mainland. Beijing says a 2020 census found some 158,000 Taiwanese entrepreneurs, professionals and others live on the mainland.

China’s ban on imports of citrus, fish and hundreds of other Taiwanese food products hurt rural areas seen as supporters of President Tsai Ing-wen, but those goods account for less than 0.5% of Taiwan’s exports to the mainland.

Beijing did nothing that might affect the flow of processor chips from Taiwan that are needed by Chinese factories that assemble the world’s smartphones and consumer electronics. The island is the world’s biggest chip supplier.

A second group of U.S. lawmakers led by Sen. Ed Markey, a Democrat from Massachusetts, arrived on Taiwan on Sunday and met with Tsai. Beijing announced a second round of military drills after their arrival.

Taiwan, with 23.6 million people, has launched its own military drills in response.

On Thursday, drills at Hualien Air Base on the east coast simulated a response to a Chinese missile attack. Military personnel practiced with Taiwanese-made Sky Bow 3 anti-aircraft missiles and 35mm anti-aircraft cannon but didn’t fire them.

“We didn’t panic” when China launched military drills, said air force Maj. Chen Teh-huan.

“Our usual training is to be on call 24 hours a day to prepare for missile launches,” Chen said. “We were ready.”

The U.S.-Taiwanese talks also will cover agriculture, labor, the environment, digital technology, the status of state-owned enterprises and “non-market policies,” the USTR said.

Washington and Beijing are locked in a 3-year-old tariff war over many of the same issues.

They include China’s support for government companies that dominate many of its industries and complaints Beijing steals foreign technology and limits access to an array of fields in violation of its market-opening commitments.

Then-President Donald Trump raised tariffs on Chinese goods in 2019 in response to complaints its technology development tactics violate its free-trade commitments and threaten U.S. industrial leadership. Biden has left most of those tariff hikes in place.