Trading Partner Portal: Taiwan

Overview

Remarks by AIT Chair Rosenberger at the California Chamber of Commerce International Trade Forum
American Institute in Taiwan, May 8, 2024

U.S., Taiwan Strengthen Ties at Inaugural Trade Meeting in Washington
CalChamber, June 28, 2022

Interview Series Featuring California’s Key Trading Partners – Featuring Ming-Chi Scott Lai, TECO Director General in San Francisco:
Shared Interest in High Tech, Ag Products Elements in Close Economic Collaboration
CalChamber, August 21, 2020

Forum Examines Role of Taiwan, U.S. in Post-Pandemic Supply Chain Restructuring
CalChamber, December 8, 2020

Trade Overview

The rapid economic rise of Taiwan, also known as Chinese Taipei, during the latter half of the 20th century and into the 21st century is attributable to its strong emphasis on trade. Strong export sectors include electronics, machinery, and petrochemicals.

Taiwan boasts a population of 23.3 million, with a net trade surplus and has the world’s fifth largest foreign reserves. Its estimated GDP in 2023 was $752 billion. Taiwan’s major export partners are China, Hong Kong, the United States, Japan and Singapore. The major import partners are Japan, China, and the United States. CIA World Factbook

Taiwan is a member of the World Trade Organization (WTO), the Asia Development Bank, and the Asia-Pacific Economic Cooperation (APEC) forum. It also has observer status in the Organization for Economic Cooperation and Development (OECD).

U.S. – Taiwan Trade

Taiwan is the 13th largest export market for the U.S. with exports to Taiwan equaling $39.78 billion in 2023. Top export categories included computer and electronic products ($9.3 billion), oil and gas ($7.12 billion), non-electrical machinery ($5.44 billion), transportation equipment ($3.7 billion), and chemicals ($3.63 billion). The U.S. is Taiwan’s second largest trading partner and a key destination for Taiwanese investors.

The U.S. imported a total of $87.75 billion in 2023 from Taiwan, with computer and electronic products being the majority of the total at $50.05 billion. Other top imports being non-electrical machinery ($6.5 billion), fabricated metal products ($6.44 billion), transportation equipment ($4.96 billion), and electrical equipment, appliance & equipment ($3.8 billion).

“Shortly after the USMCA vote, a bipartisan group of 161 lawmakers sent Lighthizer a letter urging him to work toward starting negotiations with Taiwan. Reps. Steve Chabot (R-Ohio), Albio Sires (D-N.J.), Mario Diaz-Balart (R-Fla.), and Gerry Connolly (D-Va.) led the effort. There was no immediate USTR response.” (Politico)

California – Taiwan Trade

California exported over $8.85 billion to Taiwan in 2023. Top categories included computer and electronic products ($2.9 billion), non-electrical machinery ($1.59 billion), transportation equipment ($1.11 billion), waste and scrap ($621 million), and miscellaneous manufactures ($547 million). California has the second highest number of exports to Taiwan within the U.S. and Taiwan is the sixth largest importer of California goods and services, the fourth largest in Asia.

Taiwan is the third largest import market for California, with California importing a total amount of $23.9 billion in 2023. Top imports included computer and electronic products ($19.8 billion), non-electronical machinery ($1.69 billion), electrical equipment ($1.38 billion), appliances and components ($1.34 billion), transportation equipment ($1.24 billion), and fabricated metals products ($1.19 billion).

FDI – Taiwan

U.S. FDI in Taiwan was $19.3 billion in 2023, while Taiwanese FDI into the U.S. was $15.6 billion in the same year. Taiwanese FDI in the U.S. supported 20,000 jobs through workers employed by U.S. Affiliates of majority Taiwan-owned firms and $185 million in research and development in 2021. Taiwan also contributed $2.4 billion to expanding U.S. exports. The top industry sectors for Taiwanese FDI were semiconductors, business machines, software and IT services, electronic components, chemicals, and communications. Select USA

In California, Taiwan is the tenth largest source of FDI through foreign-owned enterprises (FOEs). In 2023, Taiwanese FOEs in California provided 23,582 jobs through 412 firms amounting to $2.76 billion in wages. The top jobs by sector are professional/business services, wholesale trade, manufacturing, transp./warehousing/&utilities, and leisure/hospitality (World Trade Center Los Angeles FDI Report).

Several Taiwan-affiliated companies in California are CalChamber members such as: Delta Products Corporation, Kingston Technology, and Super Micro Computer.

More Resources and Articles:

Taiwan Economic Information from the Taipei Economic and Cultural Office in Los Angeles (May 2013).

Other Useful Resources:

Quarterly Report on Intellectual Property Rights Protection in Taiwan
Intellectual Property Office, Ministry of Economic Affairs, April – June 2020

Improving Cross-Strait Relations

In the past decade, relations between Taiwan and mainland China have been improving primarily through economic and trade policies. In 2001, Taiwan formally opened direct trade, travel, and postal service from Fujian province in mainland China to the Kinmen and Matsu Islands, which are part of Taiwan but are directly off the coast of China’s Fujian province. These islands (among others) were under dispute between Taiwan and China during the First and Second Taiwan Strait Crises in the 1950s.

In 2002, direct cross-Strait trade became allowed and was followed in later years by openings in cross-Strait transportation, shipping, tourism, and postal service. It was estimated that more than 1.5 million tourists from mainland China visited Taiwan in 2010. China is Taiwan’s biggest trading partner and Taiwanese investments into mainland China range from $150 to $300 billion. In January 2010, three financial memorandums of understanding came into effect between Taiwan and China regarding banking, securities, and insurance further improving relations.

In June 2010, Taiwan and China signed the Economic Cooperation Framework Agreement (ECFA), a landmark agreement between the two. It is hoped that the ECFA will lead to a future free trade agreement between Taiwan and China, as well as improving cross-Strait relations. Another goal of Taiwan after the ECFA is to create stronger trade pacts with other Asia-Pacific regional powers especially ASEAN and the US.

(Sources: U.S. Department of Commerce, U.S. Department of State, CIA World Factbook)

President Tsai Addresses Taiwan’s Diplomatic, Security, and Economic Challenges at Videoconference Jointly Sponsored by US-Based Think Tanks
Office of the President of Taiwan, August 2020

Events

CalChamber Met with Representatives from TECO San Francisco

October 18, 2023 (From left to right:) Jason Liu, Economic Secretary, TECO San Francisco; Ellen Chen, Director, Economic Division, TECO San Francisco; Susanne Stirling, VP International Affairs, CalChamber; and Nikki Ellis, International Affairs Specialist, CalChamber. Nikki Ellis was recently invited to Taiwan to participate in the Ministry of Foreign Affairs’ U.S. and Canada Visitor Leadership Program.

CalChamber Meeting with Taiwanese Representatives

(Center) Allan Zaremberg, President and CEO, CalChamber; Joseph Ma, Director General, Taipei Economic and Cultural Office in San Francisco; Susanne Stirling, Vice President of International Affairs, CalChamber; and Simon Lai, Executive Director, Taiwan Trade Center in San Francisco.

On July 2, 2018, the CalChamber met with Taiwanese representatives including Joseph Ma, Director General of the Taipei Economic and Cultural Office in San Francisco and Simon Lai, Executive Director of the Taiwan Trade Center in San Francisco. They were accompanied by representatives of the local Taiwanese business community in Sacramento.