Taiwan largest beneficiary of U.S.-China trade war: U.N. report
Taipei, Nov. 6 (CNA) The ongoing trade war between the United States and China has hurt both of those economies but helped other countries by diverting production to their markets, with Taiwan the biggest beneficiary, a United Nations report has argued.
The increase in tariffs imposed on Chinese goods led to a 25 percent decline, from US$130 billion to US$95 billion, in U.S. imports of tariffed products in the first half of 2019, according to a research paper released Tuesday by the United Nations Conference on Trade and Development (UNCTAD).
Several export-oriented economies, including Taiwan, Mexico, the European Union and Vietnam, have benefited from trade diversion effects, and Taiwan has been the biggest winner, according to the report's author, Alessandro Nicita, a UNCTAD economist.
The diversion of the production of goods for exports to the U.S. from China to Taiwan resulted in additional exports from Taiwan to the U.S. of about US$4.2 billion in the first half of 2019, the report found.
That was more than the additional US$3.5 billion, US$2.7 billion and US$2.6 billion in exports to the U.S. by Mexico, the European Union and Vietnam, respectively, during the six-month period, the report said.
Over the first six months of the year, most of the cost resulting from an increase in tariffs imposed on Chinese goods was passed down to U.S. consumers and companies, according to the report.
"U.S. consumers are paying for the tariffs...in terms of higher prices," Nicita wrote. "Not only final consumers like us, but importers of intermediate products -- firms which import parts and components from China."
"The longer the trade war goes on, the more likely these losses and gains will be permanent," Nicita wrote, referring to falling exports from China to the U.S. and diversion effects.
The biggest increase in exports from Taiwan came primarily in the office machinery and communication equipment, while office machinery has been the hardest hit sector in terms of Chinese exports to the U.S. market, with imports from Washington falling by almost US$10 billion.
By sector, the trade war has led to increases of US$2.83 billion in office machinery exports, US$491 million in communication equipment exports and US$287 million in electrical machinery exports by Taiwan to the U.S. in the first half of 2019, the report said.
It did not provide any further breakdown of the types of products covered in the "office machinery" category.
Taiwan's trade data echoed the trend of exports being diverted from China to Taiwan.
In the first nine months of 2019, Taiwan's overall exports fell 2.5 percent from a year earlier to US$242.3 billion amid falling global demand, but its exports to the U.S. were up 17.7 percent year-on-year at US$34.06 billion, according to the Ministry of Finance.
In response to the UNCTAD report, Finance Minister Su Jain-rong (蘇建榮) said he was upbeat about the industrial restructuring seen in Taiwan as a result of the global trade war.
Su said Taiwanese investors have been building a non-red supply chain by moving some of their production capacity from China, which he said was a positive step for Taiwan's economy in the long term.
Since the trade war began, several Taiwanese companies that had put most of their manufacturing in China have invested in or expanded production lines in Taiwan to make goods for the U.S market and avoid its punitive tariffs on Chinese-made products.
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