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Published Date: 2017-08-15
The Taiwan Institute of Economic Research (TIER) says a trade war between the US and China could be damaging to Taiwan.
Concerns about US-China trade friction were heightened Monday when the US president, Donald Trump, authorized a probe into possible Chinese theft of intellectual property. The probe could lead to trade sanctions against China.
The director of the TIER’s Macroeconomic Forecasting Center, Sun Ming-te, said Tuesday that a US-China trade war would have both a direct and an indirect impact on Taiwan.
Sun said that past US and EU sanctions on steel and solar panels from China have covered Taiwan as well. At the same time, he said reduced Chinese exports due to sanctions could also hurt Taiwan. This is because Taiwan provides many of the electronics and components that go into these exports as well as the machinery and petrochemicals used in their production.
Sun said there is still time to prevent a trade war. He said Beijing’s new leadership after the Communist Party’s national congress in the autumn could deescalate trade tensions. Sun also said the potential US trade probe is not in line with WTO rules.
Sun said Taiwanese businesses should think about mitigating the risk of a US-China trade war by setting up backup production bases in the countries covered under the government’s New Southbound policy. The policy seeks closer ties with countries in South and Southeast Asia, as well as Australia and New Zealand.