Taiwan breaks free from China dependence as US becomes top export market

TAIPEI(Taiwan): The United States surpassing China as Taiwan’s top export destination could stimulate long-term industrial development and wage growth, given the strength of the US economy, said Chiou Jiunn-rong, an economics professor at National Central University, Focus Taiwan reported.

Chiou’s comments came after Taiwan’s Ministry of Finance announced that exports hit a record USD 51.74 billion in May, fueled by surging global demand for artificial intelligence (AI) products. Information and communication technology (ICT), along with the audio/video sectors, led the growth.

According to Focus Taiwan, the US accounted for 30 per cent of Taiwan’s total exports in May, overtaking China and Hong Kong, which together made up 27.2 per cent.

This shift marks a significant departure from Taiwan’s previous export structure, which once saw over 40 per cent of exports sent to China. Chiou noted that such concentration raised economic and geopolitical risks. With global supply chains adjusting and US-China tensions rising, Taiwan’s pivot toward the U.S. market reflects broader economic realignment, Focus Taiwan reported.

Chiou emphasised that exporting to a high-income country like the US brings distinct advantages, including access to more lucrative markets and stronger demand for advanced goods. He contrasted this with the economic vulnerabilities Taiwan faced when deepening trade ties with China under the 2010 Economic Cooperation Framework Agreement (ECFA), which sparked fears of wage suppression and job losses due to “factor price equalisation.”

While the export surge is encouraging, Chiou cautioned that Taiwan should not become overly reliant on any one market, especially given the unpredictability of US trade policy under US President Donald Trump. Diversification remains essential, Focus Taiwan quoted him as saying.

Gordon Sun, director at the Taiwan Institute of Economic Research, added that AI server exports to the U.S. were a major factor behind the structural shift. However, he warned the trend may not be sustainable if it relies too heavily on a single product category, Focus Taiwan reported. (ANI)