Taiwan’s exports to the United States have experienced a remarkable 80% increase in April compared to the same period last year, reaching historic highs, Bloomberg reported on May 16. This surge is part of a larger trend among major Asian economies, including South Korea and Japan, reflecting U.S. efforts to reorganize the global supply chain and reduce dependency on China.
From January to April, Taiwan’s exports to the U.S. have outpaced those to China, indicating a significant shift in trade dynamics. The share of China, including Hong Kong, in Taiwan’s trade has been steadily declining, underscoring this reorientation.
The Biden administration’s firm stance on China, marked by increased tariffs on products such as electric vehicles, semiconductors, and solar cells on May 14, has further influenced trade patterns. These tariffs are expected to impact trade with other major U.S. allies in Asia, such as South Korea and Japan, which are already benefitting from increased export shares to the U.S. at China’s expense.
The exclusion of China from the U.S. supply chain strategy is also redirecting global investment flows. Companies are increasingly investing in Southeast Asia and establishing factories in the U.S. to qualify for subsidies, further diminishing China’s role in the global supply chain.
European companies are also showing reluctance to enter the Chinese market, with only 13% considering China the optimal investment location, down from 50% in 2021. Japan’s new investments in China have been on a downward trend since peaking in 2021.
Taiwan’s exports, which were once heavily reliant on Chinese factories, are now effectively bypassing China. The island’s new investments in China have dropped dramatically from a peak of $14.6 billion in 2010 to just $3 billion last year.
This shift is indicative of broader changes in global trade and investment patterns, driven by geopolitical tensions and economic policies aimed at reducing reliance on China. As Taiwan, South Korea, and Japan adapt to these new realities, their economic ties with the U.S. are likely to strengthen, reshaping the landscape of global commerce.
