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Taiwan Smart Machinery | July 20, 2018

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U.S.-China trade war not expected to hurt Taiwan machinery makers

U.S.-China trade war not expected to hurt Taiwan machinery makers

Taiwan’s machinery sector believes the decision by the United States to impose additional tariffs on US$50 billion worth of Chinese goods will not have an adverse impact on Taiwanese machinery makers operating in China.

Alex Ko, head of the Taiwan Association of Machinery Industry, said the facilities of Taiwanese machine tool firms in China generally target and supply the Chinese market rather than export markets like the United States.

“Taiwanese machinery exporters tend to produce products for the U.S. market in Taiwan," Ko said. “So the additional tariffs on Chinese goods will not affect Taiwanese machinery exports to the U.S. market."

Ko was responding to the announcement by U.S. President Donald Trump on Friday that his administration will impose an additional 25 percent charge on up to US$50 billion worth of Chinese goods, including machinery, robotics, aerospace items, information technology devices and auto products.

But the tariffs will not target consumer electronics products such as smartphones and TV sets.

U.S. customs agents will start collecting the duties on July 6, the government said.

China responded with retaliatory tariffs to also begin on July 6 that will targeting US$34 billion in U.S. products, including agricultural products, automobiles and seafood, amid escalating trade friction between the two largest economies in the world.

Echoing Ko, Yang Te-hwa, chairman of Taiwan-based Goodway Machine Corp., said the products his company rolls out in China are mostly destined for the Chinese market, and he was not worried about the trade friction, at least for the time being.

John Deng, Taiwan’s top trade negotiator and a minister without portfolio, said the newly announced U.S. tariff list targets 1,102 Chinese goods under Section 301 of the U.S. Trade Act, a smaller scope than previously planned by Washington.

Judging from the list, Deng said, its impact on Taiwanese goods will be limited but the government will continue to monitor the situation as it evolves.

As for Taiwanese information technology suppliers, Ray Yang, a deputy division chief at the Industrial Economics and Knowledge Center (IEK), said they should diversify their investments and broaden their global production networks.

Higher globalization is expected to help them avoid the trade war between the U.S. and China because it will allow them to export their products to the U.S. market through a third territory.


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