The central bank would closely monitor exchange rate movements to avoid being labeled a currency manipulator by Washington, as the country’s trade surplus with the US is projected to expand to US$120 billion this year, central bank Governor Yang Chin-long (楊金龍) said yesterday.
Speaking at a meeting of the legislature’s Finance Committee, Yang said that Taiwan’s widening surplus with the US, driven by strong exports amid the artificial intelligence (AI) boom, could complicate ongoing tariff negotiations.
This is a sensitive time for tariff talks, Yang said, adding that any perception of currency manipulation could pose a serious issue.
Photo: CNA
Yang made the remarks in response to questions from Democratic Progressive Party Legislator Wu Ping-jui (吳秉叡).
Taiwan’s US trade surplus exceeded US$60 billion last year and is expected to keep growing, an unfavorable factor in trade discussions, Yang said, calling on the government to seek a more balanced trade relationship.
Taiwan could help narrow the gap by increasing purchases of US arms and bulk goods, as well as encouraging companies such as Taiwan Semiconductor Manufacturing Co (台積電) to expand investments in the US, he said.
The central bank would maintain exchange rate stability to support exporters while avoiding “red lines” in dealings with the US Department of the Treasury, he said.
Commenting on investment ties, Yang said that applying Taiwan’s success with science parks in the US — a model being discussed in tariff negotiations — could bring mutual benefits.
Chinese Nationalist Party (KMT) Legislator Lin Te-fu (林德福) asked what leverage Taiwan holds in seeking relief from overlapping tariffs.
Taiwan’s advantage lies in the US’ continued reliance on Taiwan’s AI products, Yang said.
Based on media reports, negotiations between Taiwan and the US are nearing a conclusion, with the tariff rate expected to be set below 20 percent, he added.
Separately, Yang said that the NT$500 note would be redesigned as part of a banknote overhaul to improve features to prevent counterfeiting and adopt eco-friendly materials.
The sika deer design would be replaced with a new theme selected by an advisory committee, he said.
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