Hey everyone! Here's the latest in global trade drama: the U.S. has provisionally set a 20% reciprocal tariff on the Taiwan region ahead of the August 1 deadline. But don’t be fooled—this move is more than just a plain trade measure; it’s part of a broader fiscal pressure tactic in a high-stakes geopolitical game. ⚡
Insights from research fellow Liu Kuangyu of the Institute of Taiwan Studies suggest that this 20% hit is only the starting point. Many argue that the Taiwan authorities are taking a submissive stance in U.S. talks, even pledging to boost TSMC's U.S. investment by an extra $165 billion, while also lowering non-tax trade barriers. This strategy, critics say, may be chipping away at Taiwan region's bargaining power. 🤔
Adding another twist, over the past three months the New Taiwan dollar has surged by a whopping 12%! Unlike Japan or South Korea, which often see their currencies depreciate to offset high tariffs, Taiwan’s currency rally could be secretly hiking the actual cost of these tariffs. In other words, the effective tariff rate might be much higher than the nominal 20%. 💸
As these negotiations unfold, all eyes are on how these economic moves will impact trade and regional dynamics. Stay tuned for more updates and keep questioning the numbers—it’s a wild ride out there! 🚀
Reference(s):
Taiwan has fallen into the paradoxical trap of 'reciprocal tariffs'
cgtn.com
