Trade war traps Taiwan between two superpowers

G-20 ‘truce’ seen as temporary as U.S. hard-liners lead talks

Nikkei Asian Review
Date: December 05, 2018
By: Chris Horton, contributing writer and Lauly Li and Cheng Ting-Fang,Nikkei staff writetrs

TAIPEI — Taiwan’s largest companies have spent the past two decades building factories ever deeper into China, particularly in the Yangtze River and Pearl River deltas. Besides having a major impact on global supply chains, this push has left the economy of Taiwan deeply entwined with that of its large neighbor — and, increasingly, antagonist — across the strait.

Yet there are growing signs that many of Taiwan’s companies may soon begin to unwind that 20-year process by withdrawing from China, due in no small part to the U.S.-China trade dispute.

Perhaps more than any other economy, Taiwan has found itself trapped in the middle of the trade war between the world’s two superpowers. China and the U.S. are Taiwan’s top two individual trading partners, and the Taiwanese economy is heavily reliant on global trade.

Products that are made by Taiwanese companies at plants in the mainland are effectively considered to be “Made in China” — putting them in the crosshairs for U.S. tariffs that could rise to 25% early next year. Already, there are widespread concerns in Taiwan that the trade war is hurting Chinese demand for its exports.

At the recent G-20 summit in Buenos Aires, U.S. President Donald Trump and Chinese leader Xi Jinping apparently agreed to a cease fire that delays a Jan. 1 deadline for imposing 25% tariffs on $200 billion of Chinese goods by 90 days. Despite the upbeat rhetoric, though, few are expecting China and the U.S. to reach a deal that would avert the tariffs.    [FULL  STORY]

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