Taiwan’s Trade Policies Strategies and Constraints

Vinod K. Aggarwal

The National Bureau of Asian Research, 2021

The U.S.-China trade war has pushed Taiwan to diversify its trade policy away from China. This effort, of course, is not only due to the trade war. Prior to the Trump administration, Taiwan had already been strengthening its ties with South and Southeast Asia. Under President Tsai Ing-wen, for example, Taiwan created the New Southbound Policy in September 2016 “to diversify its economy and reduce reliance on China, its main trading partner.” Prior to that shift, Taiwan’s exports to China had risen rapidly, particularly from 2000 to 2010, before stabilizing and growing much more slowly and in some years even declining. Taiwan’s exports and investments to Southeast Asia also rose significantly as a result of the New Southbound Policy.

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