Taiwan’s economic challenges are not limited to the imposition of higher US tariffs, it also includes US pressure to increase defense spending, currency valuation and risks from holding too much US debt, Chinese Nationalist Party (KMT) Chairman Eric Chu (朱立倫) said on Wednesday.
Speaking at a meeting of the KMT’s Central Committee, Chu said that Wednesday last week — when the US placed steep tariffs on its trading partners — represented “the death knell of global free trade.”
“The era of globalization is over. It is being replaced by the rise of protectionism,” he said.
Photo: Tu Chien-jung, Taipei Times
US President Donald Trump has since his campaign frequently spoken of his plans to impose tariffs and demanded other countries increase their defense spending, Chu said.
Taiwan was slapped with a 32 percent tariff, despite major investments in the US by Taiwan Semiconductor Manufacturing Co, and moves to increase national defense spending and purchases of US goods, he said.
Trump has promised US$1 trillion in defense spending this year, equivalent to 3.5 percent of the US’ GDP, and Taiwan might be pressured to reach a similar spending ratio, Chu said.
There is also the issue of currency valuation, he said.
“Taiwan will face strong demands [from the US] to allow the New Taiwan dollar to rise, which will deal a heavy blow to export-oriented industries,” Chu said, adding that the government must be prepared to respond.
Chu also pointed out risks connected to Taiwan’s holdings of US debt, which comprise 92 percent of the nation’s US$577 billion of foreign exchange reserves.
“How much of this will Taiwan be able to redeem?” he asked.
Chu said the NT$88 billion (US$2.68 billion) special budget proposed by the government to mitigate the impact of US tariffs and broader financial uncertainty was “only a drop in the bucket” of what is needed.
The impact on labor and the consumer market also needs to be addressed by the special budget, he said, adding that the KMT would propose spending at least NT$200 billion.
As an export-oriented country, Taiwan cannot be completely reliant on the US and should instead learn from the example of Singapore, Chu said.
Only by not neglecting any markets can Taiwan get itself on a new road to prosperity, he said.
AGING: While Japan has 22 submarines, Taiwan only operates four, two of which were commissioned by the US in 1945 and 1946, and transferred to Taiwan in 1973 Taiwan would need at least 12 submarines to reach modern fleet capabilities, CSBC Corp, Taiwan chairman Chen Cheng-hung (陳政宏) said in an interview broadcast on Friday, citing a US assessment. CSBC is testing the nation’s first indigenous defense submarine, the Hai Kun (海鯤, Narwhal), which is scheduled to be delivered to the navy next month or in July. The Hai Kun has completed torpedo-firing tests and is scheduled to undergo overnight sea trials, Chen said on an SET TV military affairs program. Taiwan would require at least 12 submarines to establish a modern submarine force after assessing the nation’s operational environment and defense
A white king snake that frightened passengers and caused a stir on a Taipei MRT train on Friday evening has been claimed by its owner, who would be fined, Taipei Rapid Transit Corp (TRTC) said yesterday. A person on Threads posted that he thought he was lucky to find an empty row of seats on Friday after boarding a train on the Bannan (Blue) Line, only to spot a white snake with black stripes after sitting down. Startled, he jumped up, he wrote, describing the encounter as “terrifying.” “Taipei’s rat control plan: Release snakes on the metro,” one person wrote in reply, referring
The coast guard today said that it had disrupted "illegal" operations by a Chinese research ship in waters close to the nation and driven it away, part of what Taipei sees a provocative pattern of China's stepped up maritime activities. The coast guard said that it on Thursday last week detected the Chinese ship Tongji (同濟號), which was commissioned only last year, 29 nautical miles (54km) southeast of the southern tip of Taiwan, although just outside restricted waters. The ship was observed lowering ropes into the water, suspected to be the deployment of scientific instruments for "illegal" survey operations, and the coast
An inauguration ceremony was held yesterday for the Danjiang Bridge, the world’s longest single-mast asymmetric cable-stayed bridge, ahead of its official opening to traffic on Tuesday, marking a major milestone after nearly three decades of planning and construction. At the ceremony in New Taipei City attended by President William Lai (賴清德), Premier Cho Jung-tai (卓榮泰), Minister of Transportation and Communications Chen Shih-kai (陳世凱) and New Taipei City Mayor Hou Yu-ih (侯友宜), the bridge was hailed as both an engineering landmark and a long-awaited regional transport link connecting Tamsui (淡水) and Bali (八里)
RSS