The Ministry of Economic Affairs yesterday said that it plans to increase purchases of US goods such as agricultural products and crude oil in an attempt to narrow its trade surplus with the US and avoid being placed on Washington’s currency monitoring list.
Taiwan is at risk of being added to the currency manipulation watch list, as the nation’s trade surplus with the US is expected to surpass the US$20 billion threshold set by the US, the central bank said.
In the first 10 months of this year, Taiwan saw its trade surplus with the US climb to US$19.26 billion, statistics from the monetary policymaker showed.
The three criteria used by the US Department of the Treasury to determine whether a country or territory is a currency manipulator are: a significant trade surplus with the US, a material current-account surplus and involvement in persistent one-sided intervention in foreign exchange markets. A country makes it on the US Treasury's watchlist if it’s met two of three criteria.
“The trade spat between China and the US helped local companies gain more orders, which inflated [Taiwan’s] trade surplus,” Minister of Economic Affairs Shen Jong-chin (沈榮津) told reporters on the sidelines of a news conference for the launch of cloud services for local machine tool makers in Taipei.
“We have to deal with this issue. I have requested state-run companies to review [their procurement plans],” Shen said. “ We have to do something about it.”
CPC Corp, Taiwan (台灣中油), Taiwan Power Co (台電) and Taiwan Sugar Corp (台糖) could increase their imports of goods from the US, Shen said.
CPC has increased crude oil purchases from the US to make up 40 percent of its total crude oil imports this year, up from 30 percent last year, which would help narrow the trade gap between Taiwan and US, Deputy Minister of Economic Affairs Tseng Wen-sheng (曾文生) told reporters at a year-end media gathering on Monday.
The company would also consider purchasing more natural gas from the US, depending on demand and natural gas prices, Tseng said.
The ministry also plans to purchase more wheat, soybeans, beef and pork from the US, the Chinese-language Economic Daily News reported yesterday.
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