US-China trade war
Southbound Policy
Taiwan Manufacturing
Trade War Impacts
Taiwan Manufacturing
Taiwan’s two product categories – the IT and machinery sectors – are the strengths of the island’s manifold industries. Yeh pointed out that Taiwan’s machine-tool products, for example, are unique and have highly-advanced innovative features designed to handle complex manufacturing functions with the deployment of robots and automation.
“Taiwan exported in 2018 some US$ 4.565 billion worth of machine tools and components, an 8.28% increase over the earlier year. As the world’s fourth largest exporter of machine tools and components, Taiwan has averaged $ 4 billion in exports for each of the last few years drawing on a network of over 1,000 precision machinery manufacturers and 10,000 plus downstream suppliers,” he said.
Taiwan exports some 80% of its total machine-tool production to 138 countries, helping solar energy plants, major semi-conductor manufacturers, panel industries, multinational car makers and others in their innovation efforts and enhancing their competitiveness through an array of advanced machine-tool products. Taiwan’s Taichung region is home to 1500 precision machinery manufacturers.
Representatives of Taiwan companies, who have been privately telling this correspondent that they are “alarmed” by the “asymmetrical dependency” on China’s market, are in a hurry to find alternative markets. There is a revived interest in tapping the United States, once the top market for the island but ousted from this position by China since a few years.
Taiwan trade delegations have been visiting the U.S. and holding roadshows, besides participating in trade shows and meeting trade and business associations and other interest groups.
In an interview with the American Journal of Transportation, Alex Ko, the chairman of the Taiwan Association of Machinery Industry (TAMI), said that Taiwan had achieved the “all-time export record” of US$ 27.4 billion in 2018 for all segments of the machine-building industry. Ko attributed this achievement to what is described as “smart manufacturing” whose mainstay is the use of “smart technology” relying on the deployment of robots and automation in production.
“Our smart manufacturing offers the way forward. Indeed, smart manufacturing is the key to future growth and success,” Ko emphasized.
Taiwanese companies, according to Ko, have been eyeing Vietnam where they have started to invest because of its – still – lower costs of production and labor. “China cannot sustain its position as a world factory because of its rising costs and the ongoing trade problems with the USA. Thus, we expect several new factories to spring up in the region,” Ko said.
The TAMI-chairman predicted the US-China trade war would have a “short-term negative impact on Taiwan’s machine-building industry but long-term impact, in our view, is expected to be good”.
One side effect of the trade war, as US data reflects, is that President Donald Trump’s tariffs may have resulted in the gradual migration of manufacturing out of China though very little of the manufacturing has returned to the United States.
