The upcoming U.S. presidential election has drawn significant attention, with various organizations in Taiwan, including the Public Economic Research Center, the Taiwan Financial Research and Training Institute, the Taiwan Public Policy Research Association, and the Chung-Hua Institute for Economic Research, jointly hosting a seminar on “The 2024 U.S. Election and the Future Development of Taiwan’s Politics and Economy,” inviting experts to analyze the potential implications.
According to the Taiwan Financial Research and Training Institute, as a major global economy, the outcome of the U.S. election not only affects its domestic policies but also has far-reaching impacts on global market fluctuations, trade policies, and the international economic order. Taiwan’s economy heavily relies on the international market, hence the results of the U.S. election are expected to have a profound influence on Taiwan’s political and economic development.
Lee Chen-yu, Chief Economist and Vice Chairman of Investment Consulting at Cathay Financial Holdings, mentioned that with the efforts of Democratic candidate Harris, the race between Trump and Harris has become quite competitive. Harris’s campaign team has proposed a federal order to prohibit price gouging on food and groceries if elected. Lee believes that this U.S. presidential election is a major contest that challenges “globalization” with a significant backlash.
Regarding Trump’s policy plans which include deporting millions of illegal immigrants annually and building large camps for detaining and processing these immigrants, Lee highlighted Trump’s emphasis on “America First,” advocating for reshoring manufacturing and penalizing products from offshoring production. Trump’s proposed withdrawal from NATO and the World Trade Organization, along with his self-proclaimed “Tariff Man” status, reflect a continuation of U.S. protectionist policies.
Lee expressed concerns that by remaining open to nations like China that benefit from international openness without reciprocating the same level of openness, the U.S. appears overly optimistic for expecting self-reform from China. Regardless of the eventual U.S. presidential election outcome, the “New Washington Consensus” is expected to continue governing the international order. Future economic policies should not only focus on economic growth but also consider national security and industrial resilience.
He suggested that after the U.S. election results are announced, the Taiwanese government should formulate appropriate strategies, potentially engaging the Taiwan Financial Research and Training Institute and the Chung-Hua Institute for Economic Research for in-depth studies to alleviate pressures on Taiwanese businesses.
Chen Hung-ta, Director of the Financial Stability Research Center at the Taiwan Financial Research and Training Institute, noted that this year the primary concern for Americans lies in the economy. Whether it is the Democratic or Republican party that emerges victorious, tariffs are expected to be a significant issue. Trump began significantly raising tariffs on Chinese goods in 2018, a policy continued by Biden upon assuming office, indicating a consensus on increasing import tariffs on Chinese products from both U.S. parties.
Su Chien-ting, Chief Economist, Chairman, and General Manager of Fubon Financial Holding, stated that if Trump is elected president in November, he plans to impose tariffs of up to 60% on Chinese imports and increase tariffs on imports from other countries by 20%. Harris is not a proponent of free trade either. Regardless of whether it is Trump or Harris who is elected, trade tensions between the U.S. and China are likely to persist.
Su highlighted that in terms of enforcement, tariff policies are relatively straightforward, such as the U.S. imposing higher tariffs on China. Strengthening the “America First” trade policy if Trump is re-elected by imposing 60% tariffs on Chinese goods could escalate the U.S.-China trade war further, leading to increased retaliatory tariffs from China and complicating the relationship between the two nations.
Lian Hsien-ming, President of the Chung-Hua Institute for Economic Research, pointed out that over Trump’s four-year term, globalization has shifted towards “globalization is dead,” transforming economic benefits to serve political objectives into economic security, and fostering technology alliances. Trump’s policies, especially in 2019, led to a significant return of Taiwanese businesses, notably reducing investment in mainland China by approximately half, with current investments in the ASEAN countries surpassing those in mainland China, indicative of a supply chain restructuring process.
Lian noted that Trump’s policy towards China aims to rectify unfair trade practices. Biden has continued this policy and has actively sought alliances, particularly evident in semiconductor regulations, indicating a push for the reshoring of the semiconductor industry. Taiwan has shifted from being the 13th largest import country to the 8th largest for the U.S., primarily due to semiconductors. Taiwan is encouraged to establish manufacturing plants in the U.S.
Regarding the economic policies currently being discussed by Harris, the focus predominantly lies on controlling inflation, aiming to restrict product prices. Regardless of who wins the 2024 U.S. presidential election, the U.S.-China confrontation is expected to continue. Analyzing the impact on Taiwan from the policies proposed by the U.S. presidential candidates, ranging from semiconductors, supply chain relocation, green transformation, and the New Southbound Policy, it is imperative to understand the potential areas of bilateral cooperation between Taiwan and the U.S.
It is noted that the primary similarity between Trump and Harris lies in their desire to reshore manufacturing to the U.S., with the main difference lying in their approach to external economic and trade relations. Trump’s approach involves taxing all imported goods, initiating negotiations with other countries, while Biden and Harris advocate for a more collaborative approach. Taiwan’s industrial development in the past few years has thrived due to ongoing U.S.-China tensions, with Taiwanese businesses diversifying their overseas investments, leading the U.S. to become a major investment destination for Taiwan while slowing investments in mainland China.
Chang Chien-yi, President of the Taiwan Institute of Economic Research, emphasized that Trump believes half of the U.S. trade deficit originates from China, attributing it to China’s unfair subsidy policies. Trump imposed tariffs on Chinese products to address this unfair competition, especially as the pandemic exposed the importance of self-sufficiency and robustness in supply chains, prompting international supply chain relocations. Taiwan has benefitted from Trump’s policies, prompting Taiwanese businesses to invest back in Taiwan, boosting real estate and economic growth rates.
Chen Hung-ta emphasized to Epoch Times that the U.S. perceives China as taking away American jobs, leading President Trump to impose tariffs on Chinese products upon assuming office. Chinese businesses have sought to evade these sanctions by shifting manufacturing locations to Mexico and Southeast Asia. Trump has vowed to expand these initiatives, leaving China concerned about his potential re-election.
Lee Chen-yu stated to Epoch Times that if Trump is re-elected as president and imposes the proposed 60% tariffs on Chinese imports, he will likely follow through. Taiwanese businesses need to carefully consider that relocating to Mexico will not solve their problems.