Taiwan: Semiconductor production as the strongest economic sector and cross-sector integration into world trade

Taiwan: Semiconductor production as the strongest economic sector and cross-sector integration into world trade

According to a report by www.stuttgarter-nachrichten.de, Taiwan has concluded its first bilateral trade agreement with the USA. This trade pact does not initially concern any customs exemptions, but simply simplifies the processing of trade. More deals between Taiwan and other countries are expected to follow.

Semiconductor production is Taiwan's strongest industry and has systemic importance for the global economy. Exports, particularly of semiconductors and other electronic products, account for around 70 percent of annual economic output. However, Taiwan is often excluded from international trade initiatives. For example, Taiwan was not taken into account in US President Joe Biden's “Indo-Pacific Economic Framework” in order not to strain relations with China.

This bilateral trade agreement with the US could be a milestone for Taiwan. Through greater integration into global trade, Taiwan hopes to strengthen its position on the international stage. Taiwan is not officially recognized as an independent state by most countries in the world because the one-China principle has practically acquired international validity. Taiwan is not a member of the UN and is not a member of most other international organizations. Therefore, Taiwan has a great interest in further expanding its economic strength in order to secure its existence.

Reactions from China to the trade agreement have already been negative. China warns that Taiwan is falling into an "American trap" and that Taiwan's semiconductor industry could be weakened.

The impact of this trade agreement on the market and financial industry could be significant. As Taiwan expands its trade ties and strikes new deals with other countries, it may reduce its dependence on China. This presents new opportunities for Taiwanese companies and could lead to increased demand for Taiwanese semiconductors. At the same time, risks could also arise, particularly with regard to China's reactions and possible countermeasures. It remains to be seen how this trade pact and other deals will impact the market and the financial industry in the long term.

Source: According to a report from www.stuttgarter-nachrichten.de