Trading Partner Portal: Taiwan
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 has a net trade surplus and has the world’s fifth largest foreign reserves. Its estimated GDP in 2018 was $572.6 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).
US FDI in Taiwan was $17 billion in 2017, while Taiwanese FDI into the US was $8 billion in the same year. Taiwanese FDI in the US supported $106 million in research and development in 2016. Taiwan also contributed $810 million to expanding US exports. The top industry sectors for Taiwanese FDI were: business machinery, electronic components, communications, semiconductors, software and IT services, and financial services. Select USA
Taiwan supports an estimated 323,456 jobs in the United States through investment from Taiwan affiliated companies, exports of US goods and/or services to Taiwan, almost 90,000 of these jobs can be found in California.
U.S. – Taiwan Trade
Taiwan is the 15th largest importer of U.S. goods. In 2018, the U.S. imported $45.76 billion from Taiwan and exported $30.24 billion in goods to Taiwan. Top export categories included computer and electronic products, non-electrical machinery, chemicals, and oil and gas. In 2015, the U.S. exported $12.5 billion in services to Taiwan. The U.S. is Taiwan’s third largest trading partner and a key destination for Taiwanese investors. Taiwan affiliated firms invested $25.59 billion in the U.S. in 2015.
“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 $6.8 billion to Taiwan in 2018. Top categories included non-electrical machinery, computer and electronic products, transportation equipment, and waste and scrap. California has the second highest amount of exports to Taiwan within the U.S. and Taiwan is the seventh largest importer of California goods and services, the fifth largest in Asia. California received $6.3 billion in investment from Taiwan in 2015. Of the 89,117 total jobs in California supported by Taiwan, 37,493 jobs were supported by investment from Taiwan affiliated companies, 41,289 were supported by exports of goods to Taiwan, and another 10,335 jobs were supported by exports of services to Taiwan. Several Taiwan-affiliated companies in California are CalChamber members such as: Delta Products Corporation, Kingston Technology, and Super Micro Computer.
In Southern California, the number twelve country for FDI through foreign-owned enterprises (FOEs) is Taiwan. Taiwanese FOEs in Southern California provide almost 9,500 jobs through over 200 firms. This amounts to $642 million in wages. The top sectors of Taiwanese FOEs are transportation warehousing and utilities, leisure and hospitality, professional and business services, wholesale trade, and manufacturing. (LA Business Journal, V. 40 No. 21, 2018)
Characteristics of Travellers from Taiwan to California – 2017
Taiwan Economic Information from the Taipei Economic and Cultural Office in Los Angeles (May 2013).
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)
CalChamber Meeting with Taiwanese Representatives
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.
Key Country Contacts
A Golden Opportunity for a U.S.-Taiwan Free Trade Agreement
The Project 2049 Institute, February 2019