Taiwan's Central Bank Issues Warning on U.S. Trade Policies

TAIPEI (Reuters) – Taiwan's central bank warned that it sees peril in the proposed trade policies of the incoming administration of U.S. President-elect Donald Trump.

In a report to parliament ahead of governor Yang Chin-long taking questions from legislators on Thursday, the central bank stated that if Trump follows through on his policy promises, it would escalate global trade conflicts and stifle competition in the tech industry.

> "The map of global trade is in the process of being redrawn," the report said, "and will likely affect Taiwan's export momentum in the future."

The central bank highlighted that Trump's aggressive tariff policy, promised during the campaign, would be the most impactful trade policy if implemented.

A threat by Trump, who will take office in January, to impose tariffs of 60% on U.S. imports of Chinese goods poses significant growth risks for China, Taiwan's top trading partner and the world's second-largest economy. Trump also suggested a 10% universal tariff on all U.S. imports.

Taiwan was specifically mentioned in Trump's rhetoric during the 2024 campaign. He indicated that Taiwan, under threat from China — which claims the island as its own territory — should pay for its protection from the U.S. and accused it of poaching the U.S. semiconductor industry.

> "The new U.S. trade policies under Trump could impact Taiwan's financial outlook through multiple channels," the report outlined.

In the previous year, the United States had a $48 billion trade deficit in goods with Taiwan, a major semiconductor producer for tech giants like Apple and Nvidia.

The Central Bank affirmed that it will continue to monitor the implementation of major changes in U.S. policies and adjust the outlook for inflation and the economy accordingly, while responding with appropriate monetary policy strategies.

Taiwan Vice Premier Cheng Li-chun will lead a working group on future trade and technology cooperation with the new U.S. government.