Taiwan to emerge unscathed from potential U.S.-China trade war, says Central Bank
TAIPEI - Taiwan is expected to emerge largely unscathed from a potential U.S.-China trade war, but the Government is keeping a close eye on developments and stands ready to act, according to the Central Bank.
The Bank said the U.S. is implementing tariffs “in response to China’s unfair business practices related to the forced transfer of American technology and intellectual property”, adding that this action had devalued major Asian currencies, heightened market volatility and could drag other economies into a broader trade dispute.
The Bank said that, although Chinese items subject to additional U.S. duty included those sourced from Taiwan, this was not a cause for concern as they were mainly for domestic consumption and account for 0.21% of Taiwan’s gross domestic product based on 2017 trade statistics.
Affected U.S. products also had no significant connection with Taiwan.
The Bank said that, since talk of U.S. tariffs started, the New Taiwan dollar had fallen 1.9%, but “robust fundamentals like abundant foreign reserves, healthy balance of payments and nearly zero foreign debt put the country in good stead to weather fluctuations in related international capital flows”.
All necessary steps were being taken to stabilise the forex market and enhance liquidity if irregularities or seasonal factors triggered disorder and threatened to hamstring economic development, the Central Bank said. www.mofa.gov.tw (ATI).