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.
Chinese Nationalist Party (KMT) Chairman Eric Chu (朱立倫), spokeswoman Yang Chih-yu (楊智伃) and Legislator Hsieh Lung-chieh (謝龍介) would be summoned by police for questioning for leading an illegal assembly on Thursday evening last week, Minister of the Interior Liu Shyh-fang (劉世芳) said today. The three KMT officials led an assembly outside the Taipei City Prosecutors’ Office, a restricted area where public assembly is not allowed, protesting the questioning of several KMT staff and searches of KMT headquarters and offices in a recall petition forgery case. Chu, Yang and Hsieh are all suspected of contravening the Assembly and Parade Act (集會遊行法) by holding
Taiwan would welcome the return of Honduras as a diplomatic ally if its next president decides to make such a move, Minister of Foreign Affairs Lin Chia-lung (林佳龍) said yesterday. “Of course, we would welcome Honduras if they want to restore diplomatic ties with Taiwan after their elections,” Lin said at a meeting of the legislature’s Foreign Affairs and National Defense Committee, when asked to comment on statements made by two of the three Honduran presidential candidates during the presidential campaign in the Central American country. Taiwan is paying close attention to the region as a whole in the wake of a
PRAISE: Japanese visitor Takashi Kubota said the Taiwanese temple architecture images showcased in the AI Art Gallery were the most impressive displays he saw Taiwan does not have an official pavilion at the World Expo in Osaka, Japan, because of its diplomatic predicament, but the government-backed Tech World pavilion is drawing interest with its unique recreations of works by Taiwanese artists. The pavilion features an artificial intelligence (AI)-based art gallery showcasing works of famous Taiwanese artists from the Japanese colonial period using innovative technologies. Among its main simulated displays are Eastern gouache paintings by Chen Chin (陳進), Lin Yu-shan (林玉山) and Kuo Hsueh-hu (郭雪湖), who were the three young Taiwanese painters selected for the East Asian Painting exhibition in 1927. Gouache is a water-based
OFF-TARGET: More than 30,000 participants were expected to take part in the Games next month, but only 6,550 foreign and 19,400 Taiwanese athletes have registered Taipei city councilors yesterday blasted the organizers of next month’s World Masters Games over sudden timetable and venue changes, which they said have caused thousands of participants to back out of the international sporting event, among other organizational issues. They also cited visa delays and political interference by China as reasons many foreign athletes are requesting refunds for the event, to be held from May 17 to 30. Jointly organized by the Taipei and New Taipei City governments, the games have been rocked by numerous controversies since preparations began in 2020. Taipei City Councilor Lin Yen-feng (林延鳳) said yesterday that new measures by
RSS