Financial and Technology News

Ministry, executives discuss tariff war

 2018/09/17
US-CHINA BRAWL:Manufacturers who ship China-made products to the US might face more adverse effects, the Ministry of Economic Affairs told business representatives.
The Ministry of Economic Affairs has been urged to set up a special task force to help Taiwanese companies manage the impact of the nascent trade war between the US and China.
 
The ministry should also assist local companies to market their products overseas, while helping them to avoid the illegal transshipment or potential dumping of Chinese goods in the domestic market, business representatives who attended a closed-door meeting with the ministry on Friday last week said.
 
Some participants said they hoped that the government would help resolve the labor shortage once companies decide to relocate back to Taiwan should the US-China trade dispute remain unresolved, while others said the nation should participate in regional economic integration to lower tariff barriers.
 
With Washington threatening to impose fresh tariffs on another US$200 billion of Chinese goods on top of the July 6 punitive levy on US$34 billion of Chinese imports, the ministry met with several trade associations and local companies to discuss the potential effects.
 
The meeting, hosted by Minister of Economic Affairs Shen Jong-chin, gathered representatives from various sectors, including the electric, machinery, automobile, bicycle, screw and nut, petrochemical, steel, textile, machine tool and plastics sectors.
 
Many participants said that so far, the tariffs imposed by US President Donald Trump’s administration have had a limited effect on Taiwanese companies, the ministry said in a statement released after the meeting.
 
Washington’s proposed tariffs are expected to have a negligible effect on Taiwanese businesses whose products are made at their Chinese plants and sold mostly to the Chinese market, the ministry said, citing the experiences of some participants.
 
The possible effect on Taiwan’s printed-circuit board, display, LED and textile sectors is less than previously expected, as their end products are not included on the US tariff lists, and the impact is expected to be minor for makers of home appliances, electric wires and cables, machinery, power transformers and auto parts, as their production bases are located mostly in Taiwan, the ministry said.
 
At the meeting, hand tool makers and screw and nut manufacturers said that they might obtain new orders diverted from China because their production bases and supply chains are in Taiwan, it said.
 
However, manufacturers of networking equipment, machine tool parts, and entry to mid-level bicycles might face more adverse effects, as they ship most of their China-made products to the US, the ministry said.
 
Some participants said they were worried about intense competition from their Chinese peers, with Chinese products possibly flooding Taiwan and other foreign markets following the implementation of US tariffs, while others said the trade problem would eventually spread to Taiwan and asked the ministry to invite trade associations and major companies to establish a special task force to address their needs, the statement said.
 
Economists say the increasing trade row between the US and China, as Taiwan’s two major trading partners, would likely weigh on the nation’s export growth in the second half of this year.
 
Taiwan’s exports in the first half of this year grew 10.9 percent from a year earlier to US$163.83 billion, the Ministry of Finance reported last week.
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