The “phase one” trade deal signed on Wednesday by the US and China would dispel some of the uncertainty shrouding the global economy, helping to increase Taiwan’s exports, Minister of Economic Affairs Shen Jong-chin (沈榮津) said yesterday.
Shen said he is confident that the trend of Taiwanese companies returning home to invest would continue, as a number of US tariffs remain in place despite the agreement.
“This will undoubtedly contribute on the domestic front through improved market demand,” he said.
China has committed to purchase US$77.7 billion in additional US-made goods over two years, but Shen said that the impact on Taiwan’s manufacturing sector would likely be limited, as most products manufactured locally do not compete with US-made products.
China has agreed to purchase an additional US$200 billion of manufactured goods, energy and agricultural products, and services from the US.
“However, we must keep a close watch on how both parties continue the talks as the trade deal continues into its second phase,” Shen said. “There are a lot of variables with difficult-to-predict outcomes.”
Asked about rumors that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is considering relocating some production lines to the US, Shen said that the company, which does not yet have any concrete US plans, would continue to invest in Taiwan, citing TSMC’s plan to mass-produce chips locally this year using 5-nanometer technology.
Meanwhile, the ministry said that significant barriers remain before the US and China can reach a more comprehensive “phase two” agreement.
The inclusion of intellectual property protections — covering patents, copyrights and trade secrets — in the phase one agreement reflect the seriousness with which the US treats such issues, while China, in many cases, would need to make legislative changes to fulfill these commitments, which could take a long time, Vice Minister of Economic Affairs Wang Mei-hua (王美花) said in an interview with the Central News Agency.
As China has pledged to purchase a substantial amount of US goods in two year, it remains to be seen how much of the phase one agreement China can implement before the US elections in November, or when the US has said it would be open to signing a phase two agreement, she said.
Additional reporting by CNA
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