Modest impact of US tariffs on PRC goods on Taiwan: DBS

28 Sep '18

1 min read

The 10 per cent US tariffs on $200 billion worth Chinese products that became effective recently will have a modest impact on Taiwan, according to DBS Bank Ltd. Semiconductors, flat panels, electronic components and electronic products, which account for 65 per cent of Taiwan’s total exports to China, are spared from the US tariff list, DBS said in a report.

Taiwanese firms manufacturing in China and those exporting intermediate goods to China are mostly from the electronics sector, Ma Tieying, a Singapore-based economist at DBS Bank, said in the report.

Taiwanese firms have gradually reduced their exposure to China in the labour-intensive textile and clothing sector and increasingly focused on Southeast Asian countries like Vietnam, a Taipei-based newspaper cited the DBS report as saying.

Taiwanese firms have raised their presence in China’s domestic market and reduced engagement in the traditional processing trade like producing intermediate goods and assembling them into finished products in China before shipping them to the United States that prevents them from being further hurt by the escalation in trade skirmishes between the two sides, the DBS report added. (DS)

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