Statements by Taiwanese officials reflect concern about possible changes in trade and diplomatic policies that could redefine its relationship with Washington and its position on the international stage.
With Trump’s foreign policy known for its protectionist approach and aggressive rhetoric, especially toward China, Taiwan is in a delicate position. This territory, which has historically maintained a close relationship with the United States, will have to adapt to a panorama of greater volatility in the markets and the possibility of new tensions in the Indo-Pacific.
The important trade relationship between the US and Taiwan
The trade relationship between the United States and Taiwan is crucial to both the Taiwanese economy and the balance of power in the region.. The United States is one of Taiwan’s main trading partners, being its second largest export market.while Taiwan plays a critical role as a supplier of semiconductors and advanced technology, essential goods for the US economy.
The semiconductor sector, led by Taiwanese companies such as TSMC (Taiwan Semiconductor Manufacturing Company), is especially critical. TSMC produces more than 50% of the world’s advanced semiconductors, indispensable components in industries such as automotive, consumer electronics and defense. An alteration in this trade relationship could have significant repercussions, not only for both countries, but also for global supply chains.
In this context, Trump’s protectionist policies and his possible confrontation with China may have a direct impact on Taiwan. On the one hand, they could strengthen trade ties between Taiwan and the United States as an alternative to Chinese imports. On the other hand, they could intensify tensions in the Taiwan Strait, one of the most sensitive regions from a geopolitical point of view.
The impact of Trump’s policies on Asian markets
Trump’s return also raises questions about how his policies will affect Asian markets, especially as the region continues to recover from the economic effects of the pandemic.
During his first term, Trump implemented aggressive trade policies, such as the tariff war with Chinawhich had collateral effects in countries like Taiwan. Now, many fear he could implement similar measures again, increasing pressure on trade-dependent Asian economies.
Trump’s approach to China is particularly relevant to Taiwan. Although US support for Taiwan strengthened during his first term, Tensions between China and the United States also put Taiwan at the center of a geopolitical conflict. The possibility of an escalation of these tensions could lead Taiwan to face greater challenges in terms of economic and political stability.
Taiwanese markets are already showing signs of caution, with fluctuations in the stock index and adjustments in export strategies. The tech industry, which relies heavily on exports to the United States and Europe, could be particularly hard hit if trade policies become more restrictive.
Taiwan’s response to uncertainty
Faced with this new reality, the Taiwanese government has adopted a rather pragmatic approach. Economy Ministry officials have stressed the need to diversify export markets and strengthen trade relations with other economies, such as the European Union and Southeast Asian countries.. They have also noted that technological innovation and investment in research and development will be key to maintaining Taiwan’s competitiveness on the global stage.
Additionally, Taiwan is working to reduce its dependence on China as a trading partner, a goal that aligns with the “decoupling” policy promoted by the United States. Although this strategy could offer long-term benefits, it also involves significant challenges, such as reconfiguring supply chains and finding new markets.
The Taiwanese government has also noted the importance of maintain an open dialogue with the Trump administration to ensure that trade and security policies reflect mutual interests. Despite the uncertainties, Taiwan is confident that its relationship with the United States will remain strong, thanks to the historical and strategic ties that unite both nations.
The outlook for Taiwan with Trump’s return to the presidency of the United States is, however, complex.