The first round of tariffs that the US and China are imposing on bilateral imports should have limited impact on Taiwan, because the affected items account for a tiny share of the nation’s GDP, the central bank said yesterday.
The tit-for-tat tariffs, which take effect today, have raised concerns Taiwan might suffer in light of its heavy dependence on global trade, particularly with China, which absorbs about 40 percent of its outbound shipments.
“The US-China trade friction will have limited impact based on an initial estimate of items to be affected,” the central bank said in a statement.
Photo: EPA
The US is to impose a 25 percent tariff on 1,102 items from China in two stages.
The first round takes effect today and targets 818 items worth US$34 billion, the bank said.
The second phase is aimed at another 284 items totaling US$16 billion.
The US has not set a date for its implementation.
In retaliation, China is to levy a 25 percent tariff on imports of US agricultural products, automobiles and aquatic products worth about US$34 billion starting today.
It plans to introduce similar tariffs on more items worth US$16 billion.
Although mechanical equipment and electronic communication products are on the US list, Taiwanese shipments to China are mainly intended for domestic consumption, the bank said.
The first-phase list does not extend to mobile phones, laptops and other electronic products, it said.
Taiwan is home to the world’s largest contract makers of electronic parts.
Furthermore, the added value created by those products accounts for a small proportion of Taiwan’s GDP, it said.
As for China’s tariffs on US goods, Taiwan’s participation in the US manufacturing industry is so low that the impact is insignificant, the bank said.
While chips are included in the second-stage list, Taiwanese firms’ leadership in global semiconductor technology could allow them to emerge unharmed, the bank said.
The bank added that it would pay close attention to the ongoing trade row and their impact on the nation.
US President Donald Trump has threatened tariffs on an extra US$200 billion worth of items from China, if necessary.
The bank said it would also monitor global financial markets, which have had volatile capital flows from emerging to advanced markets.
Asian currencies have weakened against the US dollar after the US announcement of tariffs on June 15.
The New Taiwan dollar shed 1.9 percent during the period, ranking it in the middle among Asian currencies, the bank said.
The nation’s trade surplus and foreign-exchange reserves should help stabilize the local currency, it added.
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