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Taiwan is an important partner, will continue to talk with the US about currency

FILE PHOTO: Flags of Taiwan and the United States are planted for a meeting in Taipei
FILE PHOTO: Flags of Taiwan and the United States are placed for a meeting in Taipei, Taiwan March 27, 2018. REUTERS / Tyrone Siu / File Photo

December 4, 2021

TAIPEI (Reuters) – Taiwan and the United States have a mutually beneficial trade relationship, especially in the technology sector, and the two sides have “straightforward” channels of communication and will continue to talk to each other. on currency issues, Taiwan’s central bank said on Saturday.

Taiwan, along with Vietnam, again exceeded the U.S. Treasury Department’s threshold for currency manipulation and advanced analysis under the 2015 trade law, but the department on Friday officially restricted its they are manipulators.

In response, Taiwan’s central bank reiterated its trade surplus with the United States was due to the US-China trade war, which has seen companies shift production from China to avoid tariffs. and increased technology demand from US consumers during the COVID-19 pandemic.

“The widening of the trade surplus with the United States has nothing to do with exchange rate factors,” it said in a statement, echoing comments by a central bank official late on Friday. .

Taiwan’s current account surplus was influenced by similar factors, with growth in domestic savings contributing to the surplus as Taiwanese companies increased investment in the country and the population did not. may travel or spend a lot due to the pandemic, it added.

“For a long time, our country and the United States have maintained a close and mutually beneficial bilateral trade relationship, and are important partners in the technology supply chain,” the central bank said. said.

“The communication channels between the bank and the US Department of Treasury are very smooth, and the two sides will continue to discuss related issues in the future on the basis of good interaction.”

The US Treasury Department said it was working with Taiwan to develop a plan with “concrete actions to address the underlying causes of Taiwan’s currency’s undervalued and external surpluses.” exceed”.

The Taiwanese dollar is up more than 2.5% against the greenback this year, one of the best performing Asian currencies.

Taiwan’s case is complicated by geopolitical pressures, including rising military tensions with China and the island’s status as a major exporter of semiconductors needed to help alleviate the shortage. supply shortage for US manufacturers.

(Reporting by Ben Blanchard; Editing by Kim Coghill)

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Bobby Allyn

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