The return of Donald Trump as president of the United States portends a trade war with China. Because, during his electoral campaign, the Republican pledged to adopt a hard line towards Beijing. In particular, he promised to implement customs duties of 60% on products manufactured in China and entering American territory. Objective: to enable it to finance a large tax cut.
This measure would also have immediate repercussions on Taiwan. Because many Taiwanese companies have settled in China over the last 40 years, to set up factories there and benefit from lower operating costs. To prevent them from suffering from the Sino-American trade conflict, the authorities of the archipelago have undertaken to help them return to the country.
“We will very soon present aid for the Taiwanese business community so that they can transfer their production sites so as not to be subject to 60% customs duties”Taiwan's Minister of the Economy, Kuo Jyh-huei, declared this Thursday in front of parliamentarians.
The minister has not yet provided further details on this measure. In any case, this is not the first time that he has encouraged his companies to leave China to return to the archipelago. This was the case between 2019 and 2021, when the two great powers were already in a trade conflict. Taipei had promised its companies based in China two years of free rent in industrial zones managed by the Ministry of the Economy, subsidies and even more advantageous loans.
Taiwan warns of Chinese army maneuvers around the island
Unclear future relationships
More generally, the change of leadership in the presidency of the United States could change the situation for Taiwan, which defends its sovereignty against China. Washington has long been its most important ally and largest arms supplier. Equipment it needs to defend itself against a possible Chinese attack.
But Donald Trump suggested during the election campaign that the United States would not commit to militarily defending the island in such a situation. The then-candidate suggested that Taiwan “should pay” his country for its defense, in an interview with the financial press agency Bloomberg.
Donald Trump also accused Taiwan of having ” stolen “ in the United States their semiconductor industry. What is false according to an article from the American media CNNwho interviewed industry experts. The latter affirmed that “far from stealing, Taiwan grew its own semiconductor industry organically through a combination of foresight, hard work and investment.” The Taiwanese sector is driven in particular by TSMC (Taiwan Semiconductor Manufacturing Company), which again saw its profit jump in the third quarter, by more than 50%.
In any case, the United States has long displayed a desire for independence on the subject of semiconductors. With this in mind, Joe Biden passed the so-called “Chips Act” in August 2022, to have the entire production chain on American soil. A strategy which had however been initiated by his predecessor… Donald Trump.
Semiconductors: what political line for Donald Trump?
The EU also concerned
China is in any case not the only country affected by this potential increase in customs duties. More generally, Donald Trump wants to increase them on all goods entering the United States. Which could lead to retaliatory measures from Beijing, but also from the European Union. So the cost of this measure would be steep for everyone. It would amount to 533 billion dollars (495 billion euros) by 2029 for the economy of the Twenty-Seven, 749 billion dollars (695.4 billion euros) for the United States, and 827 billion dollars (768 billion euros) for China, according to a study by the consulting firm Roland Berger.
Aware of the risks, China is playing the appeasement card. Beijing thus warned this Thursday that there would be no “no winners in a trade war” with Washington. And that this potential war “would not be favorable to the world either” in its entirety.
But the American president could well follow through with his idea and put this measure into action. “Given his penchant for applying 'maximum pressure' before making a deal, I expect him to impose these tariffs,” Yun Sun, co-director of the China and East Asia program at the Stimson Center think tank in Washington, told AFP.
(With AFP)
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