Taiwan’s central bank warned yesterday that it sees peril in the proposed trade policies of the incoming administration of US president-elect Donald Trump.
In a report to the Legislative Yuan ahead of central bank Governor Yang Chin-long (楊金龍) taking questions from legislators today, the central bank said that if Trump follows through on his policy promises, it would escalate trade conflicts throughout the world, and stifle competition in the tech industry.
“The map of global trade is in the process of being redrawn and will likely affect Taiwan’s export momentum in the future,” the report said.
Photo: Reuters
The central bank said that the aggressive tariff policy Trump promised on the campaign trail would be the most impactful trade policy of the administration, if implemented.
A threat by Trump, who is to take office in January, to impose tariffs of 60 percent on US imports of Chinese goods poses major growth risks for China, the world’s second-largest economy and Taiwan’s top trading partner.
Trump also floated the idea of a 10 percent universal tariff on all US imports.
If the US raises tariffs globally and causes trade friction, the global supply chain will be reorganized drastically, impacting economic growth and inflation around the world, the central bank said.
The reorganizing of the global supply chain could also raise operational expenses for global firms, driving up inflation. Taiwan must pay attention to spillover effects from global inflation as many of the nation's manufacturers rely on imports of raw materials, the bank said.
As Taiwan's exports, private investments and economic growth are highly susceptible to shifts in the global economy, Taiwanese businesses could change their global deployments amid the reorganization of the global supply chain, it said.
Such change may directly impact the momentum of Taiwan's export growth and investors' willingness to invest domestically, which could have a negative impact on economic growth, it added.
Taiwan was a target of Trump’s rhetoric in this year’s campaign. Trump suggested that Taiwan, under threat from China should pay for the protection of the US and accused Taiwan of “stealing” the US semiconductor industry.
“The new US trade policies under Trump could impact Taiwan’s financial outlook through multiple channels,” the report said.
The US last year ran a US$48 billion trade deficit in goods with Taiwan, a major producer of semiconductors for clients including tech giants such as Apple Inc and Nvidia Corp.
In the report, the central bank cautioned that if Taiwan's trade surplus with the US continues to grow, being on Washington's currency manipulation watchlist could become the "new normal."
To narrow the trade surplus, the bank suggested increasing purchases of energy, farming produce and military products from the US.
The central bank has always had good communications with the US Department of the Treasury, and both sides will continue to discuss matters such as macroeconomic and currency policies, it said.
The central bank said it would continue to monitor implementation of major changes in US policies, and gradually adjust the outlook for inflation and the economy, while responding with appropriate monetary policy to ensure the stability of the domestic exchange market.
Vice Premier Cheng Li-chun (鄭麗君) would head a working group on trade and technology cooperation with the new US government, the report said.
Additional reporting by CNA
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
RSS