Taiwan central bank chief sizes up Trump on tariffs, trade balance

Taipei, Nov. 14 (CNA) Taiwan central bank chief Yang Chin-lung (楊金龍) told lawmakers Thursday that the election of Donald Trump would bring greater uncertainty, but also sought to allay their concerns about some of the incoming U.S. administration's trade policies.

Yang made the comments during a hearing at the Legislature's Finance Committee, where he discussed a Central Bank report on the potential economic impact of Trump's policies and how Taiwan can approach them.

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Yang was questioned by several lawmakers over the country's lopsided trade balance -- which in 2023 grew to a US$48 billion surplus in goods for Taiwan -- and whether it might put Taiwan in Trump's crosshairs.

"Much of what Taiwan exports to the U.S. is ICT products, and from this perspective, the trade relationship is mutually beneficial," Yang replied.

"The U.S.' strength is in product design, while Taiwan is an advanced manufacturer," Yang said, adding that the U.S. "needs our products."

In the other direction, the central bank governor said Taiwan could consider expanding purchases of American energy, agricultural goods and military products in order to reduce the trade deficit.

The investments of TSMC and other Taiwanese firms in America are another way to do this, he said.

On the issue of tariffs, Yang noted that during Trump's first term and later under President Joe Biden, the U.S. had imposed tariffs averaging 19.3 percent on Chinese exports and 3 percent for other countries.

If Trump follows through on his proposals to raise U.S. tariffs on China from 20 percent to 60 percent, and those on other countries from 3 percent to 10 percent, "that would be an extremely high rate," Yang said.

"I keep thinking to myself, is 60 percent really possible?" he said.

Yang said he suspected the threat of across-the-board tariffs was strategic.

For products like electric vehicles, lithium batteries and solar panels, 60 percent tariffs are possible, but for consumer products -- an area where the U.S. is very dependent on Chinese exports -- "the chances are very low," he said.

Yang acknowledged that his first thought upon learning of Trump's election last week was that it would present challenges.

Trump's policies can be hard to predict, and "for financial markets, uncertainty is a big problem," he said.

Citing the approach of the U.S. Federal Reserve, Yang said he would monitor the incoming U.S. administration closely but also try to refrain from speculation and predictions since the scope and timing of Trump's policies remain unclear.