On November 18, 2021 the "Taiwan Representative Office in Lithuania" was opened in Vilnius. At the same time, Lithuania decided to set up a trade representative office in Taipei in 2022 and recalled its Ambassador from Beijing. China reacted by recalling its Ambassador and downgrading diplomatic relations with Lithuania to the level of chargé d'affaires.
This diplomatic crisis soon resulted in economic tension as well, when on December 2, 2021 the Lithuanian National Radio and Television (LRT)spread the news that Chinese customs seem to have removed Lithuania from their systems and that some Lithuanian companies were having problems to clear their goods in China.
In a joint statement, the High Representative for EU Foreign Policy, Josep Borrell, and the Executive Vice President of the EU Commission, Valdis Dombrovskis declared:
"The EU has been informed that Lithuanian shipments are not cleared by Chinese customs and that import applications from Lithuania are being rejected. We are in close contact with the Lithuanian government and are gathering information in a timely manner through the EU delegation in Beijing. We are also contacting the Chinese authorities to quickly clarify the situation. If the information received were to be confirmed, the EU would also assess the compatibility of China's action with its obligations under the World Trade Organization. (....) The EU is ready to oppose all kinds of political pressure and coercive measures applied against any member state. The development of China's bilateral relations with individual EU member states has an impact on overall EU-China relations ".
On January 4, 2022 european media reported that Lithuania's President Gitanas Nauseda has said the decision to allow Taiwan to open a representative office in Vilnius under its own name was "a mistake". He said: "I think it was not the opening of the Taiwanese office that was a mistake, it was its name, which was not coordinated with me.
The name of the office has become the key factor that now strongly affects our relations with China".