CONCERNS REMAIN: While the ‘phase one’ deal might not hurt the nation, proposed harsher restrictions on Huawei could affect Taiwan’s role in technology supply chains

Taipei Times
Date: Jan 20, 2020
By: Chen Cheng-hui  /  Staff reporter

A predicted sharp rise in Chinese imports of US goods as part of a “phase one” trade deal signed by the nations last week would squeeze other trade partners, but should have a limited impact on Taiwan, DBS Bank Ltd (星展銀行) said on Friday.

Taiwan has been a major beneficiary of the US-China trade dispute and reaped the rewards of order transfers since the tit-for-tat tariffs began in July 2018. However, China’s pledge to purchase US$200 billion of US goods and services over the next two years has raised concerns that demand for Taiwanese goods could fall.

Singapore-based DBS economist Ma Tieying (馬鐵英) said it is unlikely that Taiwanese exports to China would be replaced by US goods, if China is to honor its purchase commitments.

“The overlap of the US’ and Taiwan’s export structure is low,” Ma said in a report, adding that China’s imports from Taiwan are largely concentrated in electrical machinery and equipment, while its US imports are equally comprised of agricultural goods, transport equipment and electrical machinery.
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