Earlier this month, the Ministry of Economic Affairs said the government would help Taiwanese firms relocate their China-based production plants if US president-elect Donald Trump carries out his campaign pledge to impose a 60 percent tariff on Chinese-made goods. It did not provide further details on how it would help, but Taiwanese firms in China again have to face the choice of whether to remain in the ever-challenging environment across the Strait or hasten their efforts to move out of China.
During his first term from 2017 to 2021, Trump imposed 25 percent duties on US$250 billion of Chinese imports in his first three rounds of tariff hikes, targeting products such as chemicals, automobiles, aircraft, ships and flat-panel displays. In the fourth wave of tariff increases, Trump imposed 15 percent duties on US$120 billion of Chinese goods, covering footwear, textiles, food, dishwashers and flat-screen TVs, but the duties were later halved to 7.5 percent following concessions from Beijing.
US President Joe Biden’s administration has generally continued Trump’s tariff policy. In May, Washington imposed 100 percent duties on Chinese electric vehicles, in addition to various duties on imports of Chinese solar and lithium batteries, a move that can be viewed as a fifth wave of tariff hikes on Chinese goods.
China has always been the largest overseas investment destination for Taiwanese businesses. Since Taiwan started allowing firms to invest across the Taiwan Strait in 1991 during China’s economic opening, it had approved 45,797 China-bound investments totaling US$209.7 billion as of the end of September. The manufacturing sector took the lion’s share of China-bound investments, with 35,245 investments totaling US$157 billion, ministry data showed. These Taiwanese firms are at the forefront of the US-China trade dispute, as Trump again turns to aggressive tariffs. They need to make a decision on whether to move now.
Meanwhile, the COVID-19 pandemic and a series of geopolitical conflicts have prompted many US and European businesses in the past few years to expand imports from nearby and like-minded countries, underscoring a trend of manufacturing near-shoring and “friend-shoring.” As a democratic country, Taiwan benefits from this trend, with Taiwanese products increasingly favored over Chinese goods in Western markets. In the meantime, Taiwanese firms are also expanding their footprints in India, ASEAN members and Latin America, using these countries as bases to prepare for a future beset by US-China tensions.
However, Trump’s dislike of manufacturing off-shoring or “friend-shoring,” and his idea of imposing an additional 10 to 20 percent duty on all goods imported into the US are likely to accelerate the reorganization of global supply chains again, which also warrants Taiwanese firms’ close attention.
From 2019 to 2021, as a trade dispute raged between Beijing and Washington, Taiwan initiated a domestic investment plan to incentivize overseas Taiwanese firms to return home, assisting with taxes, financing, land acquisition, utilities and labor. The government extended the plan by another three years in 2022 in light of persistent demand from overseas Taiwanese companies and the ongoing transformation in the global economy and supply chains. The plan has not only attracted 254 re-shoring enterprises to invest in Taiwan, but also spurred additional investments from supply-chain businesses.
It is unclear whether the government would extend the policy or provide other measures to assist overseas Taiwanese firms after Trump returns to the White House in January. One thing is certain: The US policy trend toward reducing its trade reliance on China would persist in the years to come. Confronting China has become a rare point of consensus between the US’ Democratic and Republican parties. These issues would inevitably affect Taiwanese firms here and abroad.
Taiwan is rapidly accelerating toward becoming a “super-aged society” — moving at one of the fastest rates globally — with the proportion of elderly people in the population sharply rising. While the demographic shift of “fewer births than deaths” is no longer an anomaly, the nation’s legal framework and social customs appear stuck in the last century. Without adjustments, incidents like last month’s viral kicking incident on the Taipei MRT involving a 73-year-old woman would continue to proliferate, sowing seeds of generational distrust and conflict. The Senior Citizens Welfare Act (老人福利法), originally enacted in 1980 and revised multiple times, positions older
The Chinese Nationalist Party (KMT) has its chairperson election tomorrow. Although the party has long positioned itself as “China friendly,” the election is overshadowed by “an overwhelming wave of Chinese intervention.” The six candidates vying for the chair are former Taipei mayor Hau Lung-bin (郝龍斌), former lawmaker Cheng Li-wen (鄭麗文), Legislator Luo Chih-chiang (羅智強), Sun Yat-sen School president Chang Ya-chung (張亞中), former National Assembly representative Tsai Chih-hong (蔡志弘) and former Changhua County comissioner Zhuo Bo-yuan (卓伯源). While Cheng and Hau are front-runners in different surveys, Hau has complained of an online defamation campaign against him coming from accounts with foreign IP addresses,
Taiwan’s business-friendly environment and science parks designed to foster technology industries are the key elements of the nation’s winning chip formula, inspiring the US and other countries to try to replicate it. Representatives from US business groups — such as the Greater Phoenix Economic Council, and the Arizona-Taiwan Trade and Investment Office — in July visited the Hsinchu Science Park (新竹科學園區), home to Taiwan Semiconductor Manufacturing Co’s (TSMC) headquarters and its first fab. They showed great interest in creating similar science parks, with aims to build an extensive semiconductor chain suitable for the US, with chip designing, packaging and manufacturing. The
When Taiwan High Speed Rail Corp (THSRC) announced the implementation of a new “quiet carriage” policy across all train cars on Sept. 22, I — a classroom teacher who frequently takes the high-speed rail — was filled with anticipation. The days of passengers videoconferencing as if there were no one else on the train, playing videos at full volume or speaking loudly without regard for others finally seemed numbered. However, this battle for silence was lost after less than one month. Faced with emotional guilt from infants and anxious parents, THSRC caved and retreated. However, official high-speed rail data have long
RSS