Office of the President Republic of China(Taiwan)

Presidential Office Spokesperson Huang Chung-yen (黃重諺) said on the morning of June 20 that President Tsai Ing-wen convened a national security meeting that day to address the latest developments in the US-China trade dispute, and formulate possible government responses. At the meeting, Premier Lai Ching-te (賴清德), Secretary-General to the President Chen Chu (陳菊), National Security Council Secretary-General David T. Lee (李大維), and other top security officials held comprehensive discussions and tabletop exercises to determine why that trade dispute had escalated, and possible future developments and responses.

Spokesperson Huang said that for President Tsai, possible repercussions of the US-China trade dispute have been an important issue ever since the dispute escalated this past March. She soon instructed the National Security Council (NSC) to set up a special task force to monitor the situation and anticipate possible new developments. 

The NSC also convened a series of six ad hoc meetings with the relevant economics, finance, and national security teams. At the sixth meeting on June 19, the latest research and analysis reports from all the teams were summarized, and then submitted to the national security heads at today's meeting.

Spokesperson Huang said that after summarizing the assessments and analyses from the various teams about possible economic repercussions of a US-China trade war on Taiwan, the NSC concluded that the impact of a 25% import tariff under Section 301 of the US Trade Act on US$50 billion of Chinese imports would be limited. On April 3 when the Office of the United States Trade Representative (USTR) released its provisional list of tariffs on products under List 1 to take effect on July 6 (a total of 1,333 items, now reduced to 818), a full assessment had already been done, showing that those tariffs would have little effect on Taiwan's domestic industries or Taiwan firms operating in mainland China.

Because Taiwan firms supply very few products on List 2, which includes petroleum, machinery, and semiconductors (with a final list pending completion of USTR public hearings), tariffs on those products would also not have a significant impact on Taiwan's overall economy.

The NSC report also pointed out that the impact on Taiwan will be much greater if the US imposes a 10% import tariff on another US$200 billion of Chinese imports; continued retaliatory measures by the United States and China could also increase global financial market volatility and encourage the spread of trade protectionism, with repercussions that could spiral out of control. But the report noted that such an extreme situation seemed unlikely.

The NSC report also pointed out that if US-China trade conflicts and antagonism become a long-term trend, Taiwan must respond to possible structural changes with caution. Possible changes include the realignment of global supply chains, major changes in the role that domestic firms on both sides of the Taiwan Strait play in regional supply chains, and possible repercussions on the trilateral Taiwan-US-China relationship.

Spokesperson Huang also said that during that day's meeting, President Tsai directed the NSC to coordinate executive-branch agencies to monitor and accurately assess the latest developments in the US-China trade conflict, and raise overall response capabilities in all government agencies. The president also instructed the Executive Yuan and its ministries and agencies to provide the public with timely explanations of relevant issues to maintain social stability and avoid undue concern by local citizens and domestic industries due to increased US-China trade tensions.

To achieve those objectives, the NSC has already set up a special task force to determine and evaluate possible short, medium, and long-term developments in the US-China trade war. That team will also make advance plans for comprehensive countermeasures, and is currently integrating information from the Ministry of Economic Affairs, Executive Yuan Office of Trade Negotiations, Central Bank, Ministry of Foreign Affairs, Mainland Affairs Council, and the National Security Council to compile comprehensive information, monitor the situation and make decisions.

As the nation faces changing circumstances, President Tsai reiterated during the meeting that for every product and sector affected by the trade war, the government will consider our needs and policy positions based on overall national strategic interests, trade interests, and our industrial development and transformation requirements.