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The contract was confirmed in a Pentagon news release on Monday that detailed an inventory of spare parts and repairs to be bought from the U.S. for Taiwanese military aircraft.
At a daily press conference on Tuesday, a spokesperson for the Chinese Foreign Ministry, Geng Shuang, expressed anger over the deal and said China had already made its feelings clear to U.S. representatives.
The Pentagon's Defense Security Cooperation Agency said in its statement that the proposed sale would "contribute to the foreign policy and national security of the United States by helping to improve the security and defensive capability of the recipient."
The statement added that Taiwan continues to be "an important force for political stability, military balance, and economic progress in the region."
Senior politicians in Beijing view Taiwan as a breakaway province that will eventually be reclaimed as part of the mainland. China has used its growing economic power to ask nations it trades with to accept this "one China" view.
However, many Taiwanese want their island to be considered a separate nation and other global powers, including the United States, have wrestled with diplomatic language to try and satisfy both sides.
Under Presidents George W. Bush and Barack Obama, military deals with Taiwan had become less frequent as Washington attempted to improve its relationship with Beijing.
If approved by Congress, this latest sale would mark the second arms deal between Taiwan and the U.S. during the tenure of President Donald Trump.
The first, and much bigger deal, was carried out in June 2017 when the U.S. agreed to sell missiles, torpedoes and an early warning system to Taiwan for $1.4 billion. At that time, a Chinese ambassador said the deal damaged trust between Trump and Chinese President Xi Jinping.
Relations between Trump and Xi are already under severe strain thanks to an ongoing trade war between the two countries.
On Tuesday, China released a paper that accused the U.S. of "trade bullyism practices." The Trump administration levied tariffs on an additional $200 billion of Chinese goods on Monday, while Beijing retaliated by targeting roughly $60 billion worth of U.S. imports.
China's Vice Commerce Minister Wang Shouwen said at a news conference on Tuesday that on trade, the U.S. was putting a "knife to China's neck."