Taipei--If there was to be a trade war between the United States and China, it would be a disaster for the world, with Taiwan and South Korea among the hardest-hit, a Taiwanese business leader said on Tuesday.
U.S. President Donald Trump's announcement that the U.S. will withdraw from the Trans-Pacific Partnership trade pact alarmed many Taiwanese business, academic and government leaders. CMC Magnetics Corp. Chairman Bob Wong (???) was among the first to sound the alarm.
"It is not yet known whether there will be a trade war between China and the U.S. If there is, then it will be a disaster with the hardest-hit being Taiwan and South Korea," Wong told the media on the sideline of a company event.
If the U.S. opts for trade protectionism, it will have a huge impact on Taiwan, he said. Trade-reliant Taiwan would do better to maintain good relations with all countries and "I would advise against a self-centered outlook," he added.
Liu Meng-chun (???), a China expert at Chung-hua Institution for Economic Research, said the 2017 Strategic and Economic Dialogue between the world's two largest economies would be an important indication as to whether a trade war is likely.
At that ministerial dialogue, the concessions the U.S. demands from China and the areas the two sides promise to open up to each other will be "key indicators," Liu said.
He said he expects the U.S. to demand more from its bilateral investment agreement with China, as Trump is likely to raise the prospect of anti-dumping and counter-balancing taxes against Chinese products.
Trump has encouraged U.S. corporations with businesses in China to remit their earnings home, while China, a developing country, asks foreign businesses to invest their earnings in China -- a development that could lead to conflict, according to Liu.
China will be severely impacted if Trump demands U.S. businesses send their money home at a moment when Chinese businesses are sending their money abroad, he added.
In addition, after the U.S. quits the TPP, it will be difficult for Taiwan to join the China-dominated Regional Comprehensive Economic Partnership (RECP) in Southeast Asia, he said.
China's demand for Taiwan to "normalize" cross-strait ties remains an insurmountable obstacle for Taiwan, Liu said.
San Gee (??), a former economics official and now a professor at National Central University, also saw little likelihood that Taiwan would be accepted by RECP as China would pressure its members to reject such an effort, even if they actually want to sign bilateral trade deals with Taiwan.
"The China factor, a political one, remains a prerequisite for Taiwan to expand its foreign relations. For now, I see no possibility for Taipei to fulfill that prerequisite, so Taiwan could become increasingly marginalized," San said.
Peng Shin-kun (???), a research fellow at Academia Sinica, agreed that Taiwan's policy of pursuing economic deals with other countries will eventually hit political snags caused by China.
Taiwan has to try and make a breakthrough, Peng said, suggesting two possible approaches. First, he said, Taiwan should seek better ties with Japan and the U.S. Second, he added, Taiwan should pay more attention to India as the government of Tsai Ing-wen pursues its New Southbound Policy.
Source: Focus Taiwan News Channel