Taiwanese business leaders and an academic are expecting US economic policies to mostly “stay on course” under a Democratic administration led by US president-elect Joe Biden while the US-China trade dispute “moderates.”
Although US President Donald Trump has yet to concede last Tuesday’s election, all the major US news outlets have called the election for Biden, and President Tsai Ing-wen (蔡英文) and numerous other world leaders have sent Biden congratulatory messages.
Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) chairman Alex Ko (柯拔希) said that US industrial policy would likely continue along the same lines, regardless of whether under Trump or Biden.
Photo: David Chang, EPA-EFE
“No matter who becomes the president of the United States, the dual-supply chain is already in place, and the made-in-America policy will continue,” Ko said, adding that Taiwanese manufacturers can play a role in both supply chains.
“It is up to us to take advantage of opportunities on both sides,” he said.
Jimmy Chu (朱志洋), chairman of machine tool maker Fair Friend Enterprise Group (友嘉集團), was upbeat about the possible benefits that a Biden administration might bring to international trade.
“If Biden can get the coronavirus situation under control, that would be good for supply chains around the world,” Chu said.
“I do not think Biden will reverse course on Trump-era policies toward China, but the trade dispute will moderate and US-China relations will stop deteriorating,” he said.
Notebook computer maker Quanta Computer Inc (廣達電腦) said its customers in late 2018 started evaluating whether to diversify supply chains in the wake of the trade dispute, and such trends would not change overnight because the US elected a new leader.
Its customers’ needs would ultimately decide how the company adjusts its plans, Quanta said.
The COVID-19 pandemic could further accelerate the trend, textile firms Makalot Industrial Co (聚陽實業) and Eclat Textile Co (儒鴻) said.
Manufacturers could seek to avoid opening new factories for a single customer or in one area to avoid putting all their eggs in one basket, they said.
Eclat added that e-commerce would become more popular in the post-pandemic era, and more models involving fewer orders can be expected, meaning that supply chains must be able to react quickly to market changes.
“There is a widespread perception that Taiwan benefits from US trade policies that target China or even individual Chinese companies such as Huawei Technologies Co (華為),” said Dachrahn Wu (吳大任), an economics professor at National Central University in Taoyuan, referring to a flurry of investment in Taiwan by returning businesses since last year.
However, the perception belies the fact that Taiwanese businesses were hurt as well as helped by the trade row, Wu said.
“Because we export many components for final assembly in China, Taiwanese companies actually have a substantial share in the US-China trade deficit Trump was trying to attack,” he said.
Wu agreed that Biden is unlikely to do a U-turn on Trump’s economic policies.
“Biden cannot turn back the clock,” Wu said. “For one thing, China now considers it strategically important to have its own supply chains.”
However, Wu did anticipate the trade dispute to calm down.
“And that is a good thing for Taiwan,” the academic said.
“Taiwanese companies are nimble. They have already positioned subsidiaries in China for the Chinese supply chain, and reinvested in Taiwan or Southeast Asia for the US supply chain,” Wu said. “Our comparative advantage is manufacturing.”
Wu does not expect the Trump administration’s ban on Huawei to be lifted under Biden.
“Huawei is a special case, because unlike 3G and 4G, which is confined to the information and communication technologies industry, 5G is much more powerful and has much wider applications,” Wu said.
“The US wants to keep the competitive advantage for as long as it can,” he added.
Additional reporting by CNA
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