U.S.-China trade deal to benefit Taiwan too: Analysts

Chinese Vice Premier Liu He (劉鶴) speaks at a press conference in Washington D.C. on Wednesday. (CNA)
Chinese Vice Premier Liu He (劉鶴) speaks at a press conference in Washington D.C. on Wednesday. (CNA)

TAIPEI (The China Post/ANN) — Taiwan could benefit from the U.S.-China trade deal inked on Wednesday in Washington, even though the overall impact on the country’s economy is still unclear, analysts said on Thursday.

U.S. President Donald Trump and Chinese Vice Premier Liu He (劉鶴) inked a trade deal on Wednesday, in which China agreed to purchase US$40 billion of American agricultural products annually among other promises.

In return, the U.S. committed to halting some planned tariffs, although, the 25-percent tariff on US$250 billion of Chinese imports imposed in March 2018 will remain in place for now.

Analysts pointed out that some of the most concerning issues, including the strengthening of intellectual property laws in China, are either absent from the deal or depicted in vague terms.

Huang Jr-tsung (黃智聰), professor at National Chengchi University’s Department of Public Finance, thinks that some business sectors in Taiwan benefited from the trade war, even though “overall the country will be better off with a more stabilized global economy.”

On whether Taiwanese companies that moved their factories back to Taiwan since Washington imposed the 25 percent tariff on US$250 billion of Chinese imports will return to China, Huang said that that it won’t be the case in the short term because “the situation in China is still uncertain” since both the U.S. and China have been known to backpedal on their words.

The Mainland Affairs Council (MAC), the main agency in charge of cross-strait political and economic affairs, told The China Post that the government will evaluate how the trade deal impacts Taiwan and “monitor closely” phase two of the trade deal.

Taiwan benefited from the trade war: BBC, UN 

A report by British broadcast company BBC cited Taiwan as one of the winners in the U.S.-China trade war.

Backing that report, a UN analysis released last September found that Taiwan “was the largest beneficiary of the trade diversion effects of United States tariffs on China, accounting for additional exports to the United States of almost US$ 4.2 billion in the first half of 2019.”

According to the analysis, office machinery was the hardest hit sector in the trade war, with U.S. imports from China, fell by almost US$ 10 billion in the first half of 2019.

“Trade diversion effects for this sector are quantified to be about US$ 4.5 billion, most of which to the advantage of Taiwan,” the report reads.

Follow Mimi Hsin Hsuan Sun on Twitter: https://twitter.com/mimihhsun

Read More from The China Post