Taipei, President Tsai Ing-wen (???) called a meeting with high-ranking officials Wednesday to discuss the possible impact of a looming trade war between the United States and China, according to Presidential Office spokesman Alex Huang (???).
Tsai, who is highly concerned about the possible fallout on Taiwan, urged the top brass to come up with response measures and heard an analysis report by the National Security Council (NSC) officials in the meeting, at which Premier Lai Ching-te (???), Presidential Office Secretary-General Chen Chu (??) and NSC Secretary-General David Lee (???) were also present, Huang said in a statement.
Under Tsai's instruction, the NSC also established a task force to monitor the latest developments of the situation amid growing tension between the world's two largest economies that has been simmering since March, Huang noted.
Quoting the NSC analysis, Huang said the impact of a 25 percent tariff announced by the U.S. on US$50 billion worth of Chinese imports will be limited.
According to Huang, a full assessment by the NSC suggests that the impact of a "list one" containing 818 Chinese goods, announced by the U.S. April 3 and slated to be imposed July 6, "will have little effect on Taiwan's related industries and Taiwanese companies based in China."
The impact of a "list two" that covers China-made petrochemical products, semiconductor products, car and aircraft parts, and machine tools on Taiwan's economy will also be limited, as "Taiwanese companies are not the major suppliers to these Chinese industries," he said.
However, Huang warned, if the U.S. really means to levy a 10 percent tariff on US$200 billion worth of the Chinese goods included on "list two," the impact on Taiwan will be greater.
If the U.S. and China adopt tit-for-tat measures, the world's financial markets will be strongly shaken, and it could invite protectionism to spread all over the world, pushing the situation out of control, he said.
"However, the chances of such an extreme situation occurring are slim," he went on.
As the U.S.-China trade conflict is likely to be a long drawn-out affair, the NSC report also suggests that Taiwan must remain on high alert to possible structural changes, such as an overwhelming shakeup in the global supply chain, a drastic change in the role of Taiwanese companies in Taiwan and China in the regional supply chain, and its possible impact on U.S.-China-Taiwan relations, he said.
To avoid a sentiment of insecurity that a trade war would cause among Taiwan's people, Tsai also asked the Executive Yuan and other relevant authorities to explain the situation to the public at an appropriate time when necessary, Huang said.
Source: Focus Taiwan News Channel