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The U.S. and Lithuania have agreed to cooperate on ways to counter what they called China’s “economic coercion,” in a move that is likely draw a strong rebuke from Beijing.

U.S. Trade Representative Katherine Tai told Lithuanian Foreign Minister Gabrielius Landsbergis on Wednesday that the Baltic nation had Washington’s support during a call that was held amid a diplomatic dispute over Taiwan opening a representative office in Vilnius under its own name.

The two officials pointed out that the U.S. and European Union, “as democratic market economies, share a number of core values and principles that we need to defend internationally.”

“The way to confront bullying is not to give up, it’s to work together,” Kolas Yotaka, the spokesperson for the Presidential Office in Taipei, said in a tweet.

Lithuania faces unofficial trade hurdles and a downgrade of diplomatic ties with China after it allowed the office to open in its capital, a move Beijing deems a violation of its “One China” principle. China also recalled its ambassador, though it denies it is blocking the nation’s exports. The EU has raised the dispute with the World Trade Organization.

Earlier Wednesday, Taiwan pledged to establish a $200 million fund to invest in Lithuania and open its markets to the country in reaction to what it calls economic pressure from China.

Taiwan would use the fund to invest in the areas of semiconductors, lasers, biotechnologies and research, Eric Huang, the head of the representative office in Vilnius, said at a news conference. It will also send a team to assess Lithuania’s aspirations to develop a semiconductor industry, he added.

“It’s time for us to help with your difficulties,” Taiwanese Deputy Foreign Minister Harry Ho-jen Tseng said at the same news conference.

Lithuania has sought to build closer economic ties with Taiwan and has been expecting to gain a foothold in Taiwan’s semiconductor sector since last year, when it left the Chinese-led 17+1 format, a group of EU states that China uses to engage and influence the bloc.

Taiwan’s National Development Council and Lithuania’s Economy Ministry have yet to discuss the details of the investment fund, which will be financed by Taiwan’s National Development Fund. An even larger fund for investments backed by Taiwan’s central bank is in the works, Huang said.

On the trade front, Taiwan is also working to redirect some 120 containers of Lithuanian products that have been halted at Chinese ports and to open up the island’s market for Lithuanian dairy and grain, Huang said. A Taiwanese company also purchased 20,400 bottles of Lithuanian rum that China refused to let into the country, according to the South China Morning Post.

“Taiwan is committed to accelerate the process for Lithuania as Lithuania faces such unprecedented economic coercion in international trade history,” Huang said.

The dispute has triggered political tensions in Lithuania, where President Gitanas Nauseda criticized the government on Tuesday for opening the office with Taiwan and said using the name of the democratically ruled island in the label was a mistake.

Nauseda later walked back the remarks, saying his position on the opening of the office remained positive and unchanged, adding he never called it a mistake.

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