Taiwan Shifts Economic Focus as US Surpasses China in Exports

The United States has emerged as Taiwan's leading export market, surpassing China in a significant shift that could herald long-term industrial development and wage growth. This development is attributed to the robust nature of the US economy, according to Chiou Jiunn-rong, an economics expert from National Central University. Recent figures from Taiwan's Ministry of Finance reveal that exports reached a historic high of USD 51.74 billion in May, driven by booming global demand for AI products, as reported by Focus Taiwan. Information and communication technology sectors led the rise, with the US accounting for 30% of Taiwan's total exports in May, overshadowing China and Hong Kong's combined share of 27.2%.

This recalibration marks a departure from an era when over 40% of Taiwan's exports were destined for China, a scenario fraught with economic and geopolitical implications, Chiou noted. As global supply chains evolve amid rising US-China tensions, Taiwan's strategic pivot towards the US exemplifies a broader economic realignment, as reported by Focus Taiwan. Chiou highlighted the advantages of exporting to an affluent market like the US, noting the access to more lucrative opportunities and a heightened demand for advanced goods, contrasting this with the economic vulnerabilities Taiwan faced under the 2010 Economic Cooperation Framework Agreement with China.

Despite the encouraging export surge, Chiou cautioned against excessive reliance on a single market, citing the unpredictability of US trade policies under President Donald Trump. He emphasized the importance of diversification, as Focus Taiwan noted. Gordon Sun, a director at the Taiwan Institute of Economic Research, underscored that AI server exports to the US were a pivotal factor in the restructuring but warned of the potential risks of depending too heavily on a singular product category.

(With inputs from agencies.)