Discussion on the Impact of Sino-US Trade War on Taiwanese Manufacturing

Jui-Lung Chen

doi:10.5539/ijbm.v14n7p70

Abstract

When US President Donald Trump signed the Section 301 Investigation in March 2018, the Sino-US trade war intensified, exerting a great impact on the global economy. The Trump Administration recently has piled up the economic and trade pressure on China, while China seeks to resort to the WTO dispute settlement mechanism and break the siege imposed by the trade war through the &quot;Belt and Road Initiative&quot;. US launched a trade war against China due mainly to the huge trade deficit with China, and the trade frictions between the U.S. and China have caused turbulence on the Asian and global industrial chains. Therefore, by analyzing the recent trade conflicts between the U.S. and China and the responses given by both respectively, this paper explores the possible impact on Taiwan&#39;s manufacturing and its potential response.

Highlights

The global economy and trade are thriving but a string of problems have occurred including the trade war that all countries should work to prevent
After the Trump Administration came into power, it has repeated the accusation on the unfair trade between China and the U.S, and highlights the trade deficit by withdrawing from Trans-Pacific Partnership Agreement (TPP), initiating a new round of discussion on the North American Free Trade Agreement (NAFTA) and raising import tariffs on steel and aluminum products
Taiwan exports components and semi-finished products to China where they are processed and manufactured as finished products and sell to the U.S Vendors following this model will be directly impacted, and huger impact is experienced by Taiwanese manufacturers that directly set up factories and produce in Mainland and sell their products to the U.S considering the affected industries and manufacturers, many Mainland-based enterprises have shifted orders or production capacity to the surrounding areas

Summary

Introduction

The global economy and trade are thriving but a string of problems have occurred including the trade war that all countries should work to prevent. Chang (2018b) held that the Sino-U.S trade dispute goes far beyond resolving the U.S trade deficit. It is the rival between the U.S and China for the global hegemony. The recent growth and decline of power between the U.S and China are showed in the huge trade deficit, and in a wide range of areas such as currency, intellectual property rights, high-end technology manufacturing and military confrontation in South China Sea (Chang, 2018b; Lian, 2019). This paper analyses the recent trade conflict between the U.S and China and their respective response, the impact on Taiwan and the potential countermeasures of Taiwan's manufacturing

Literature Review

Research and Analysis

Results and Discussion