Taiwan c. bank warns of risks from Trump’s trade policies

Taiwan’s central bank cautioned about the potential risks of the trade policies proposed by the incoming US administration under President-elect Donald Trump, according to its report on Wednesday.

The bank expressed concerns that if Trump implements his policy agenda, it could lead to increased trade conflicts globally and hinder competition in the tech sector. Governor Yang Chin-long is set to address these issues in parliament on Thursday.

“The map of global trade is in the process of being redrawn,” the report said, “and will likely affect Taiwan’s export momentum in the future.”

The central bank warned that Trump’s proposed aggressive tariff policy could have a significant impact if implemented.

Trump’s threat to impose a 60 per cent tariff on Chinese imports poses risks for China and Taiwan, while he also suggested a 10 per cent universal tariff on all US imports.

During the 2024 campaign, Trump targeted Taiwan, accusing the island of poaching the US semiconductor industry and suggesting that Taiwan should pay for US protection against China’s threats.

The US trade deficit with Taiwan was $48 billion last year, impacting Taiwan’s financial outlook. Taiwan is a key producer of semiconductors for tech giants like Apple and Nvidia.

The central bank will monitor US policy changes and adjust inflation and economic outlook accordingly with appropriate monetary policy. Vice Premier Cheng Li-chun will lead a working group on trade and technology cooperation with the new US government.

Attribution: Taiwan’s central bank

Subediting: M. S. Salama