Industry leaders brace for bumpy ride

The China Post news staff

TAIPEI, Taiwan — After newly inaugurated President Donald Trump announced Washington’s withdrawal from the Trans Pacific Partnership (TPP), local business leaders warned of the adverse impact on Taiwan of a protectionist U.S. The heads of several business groups warned that the U.S.’ impending withdrawal from the mooted multilateral trade deal would hit jobs, exports and Taiwan’s currency, urging the government to explore a bilateral trade deal to cushion the blow, according to Central News Agency (CNA). US-China Trade War “If the U.S. enforces trade protectionism — as Trump has implied it will — mainland China will bear the brunt, and a trade war between both countries could be triggered soon, given Trump has repeatedly accused China of manipulating its currency,” Lai Chen-yi, chairman of the General Chamber of Commerce of the Republic of China, told the CNA. Lai said a protectionist government in Washington would weaken the U.S. dollar, forcing Asian currencies — including the New Taiwan dollar — to appreciate against the greenback. “This would undermine the export performance of Taiwan, as it still maintains heavy trade reliance on the U.S.” Domestic Unemployment to Rise Lai said domestic employment would also suffer. “Trump has placed a strong emphasis on buying American and hiring American. This could prompt Taiwanese enterprises to relocate their production lines to the U.S., leading to a rise in domestic unemployment and a drop in Taiwan’s export trade,” he said. While urging the government to take preemptive measures as soon as possible, Lai also cautioned against President Tsai Ing-wen letting Taiwan become a “bargaining chip” as the U.S. seeks to extract commercial benefits from China. Meanwhile, Tsai Lien-sheng, secretary-general of the Chinese National Federation of Industries, said Taiwan’s exports to the U.S. would likely to face higher tariffs under Trump. Seeking FTAs Tsai said that with Trump declaring the U.S.’ withdrawal from the TPP, the chances of Taiwan joining the mooted trade bloc were slim. “Accordingly, Taiwan should proactively explore the opportunity of a bilateral free trade agreement with the U.S., regardless of whether the U.S. uses Taiwan as a bargaining chip during its trade negotiations with China.”

He added that while the government was pushing its “New Southbound Policy,” it was still hindered by a lack of free trade agreements with the Southeast Asian countries targeted by the policy. In seeking a free trade agreement with the U.S., Taiwan should seriously consider reducing restriction on the import of U.S. pork products, Tsai said. “If you’re not determined to enforce trade liberalization, forget the FTA.”