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Taiwan eyes closer U.S. tech ties, island's top trade body says

Taiwan eyes closer U.S. tech ties, island's top trade body says


Taiwan eyes closer U.S. tech ties, island's top trade body says

TAIPEI -- Taiwan aims to forge closer ties with the U.S. on electric vehicles, the metaverse and next-generation communication technologies as Washington pushes to bring supply chains onshore, the island's top trade promotion organization said.

The government-backed Taiwan External Trade Development Council (TAITRA), will host its first-ever expo in Washington in October to showcase Taiwan's tech capabilities, James Huang, chairman of the council, told Nikkei Asia in an interview.

"Our relations with the U.S. are the warmest ever. You can tell from Washington's support, political heavyweights' visits to the island and the American Institute in Taiwan's collaboration with our industry," Huang said, referring to the AIT, the de facto U.S. embassy on the island. "It is the best timing for us to seek deeper collaboration with the U.S. industry."

TAITRA will also lead two industry delegations on EVs and smart medical technologies to the U.S. capital, California and Michigan in October.

Huang, a former foreign affairs minister, said TAITRA is inviting 50 leading Taiwanese tech suppliers in EVs, smart medical equipment and 5G technologies to participate in the expo. The event is intended to demonstrate to Americans that Taiwan not only shares the same "democratic values" with the U.S. but also has technological strengths that go beyond semiconductors, he said.

"The U.S. trip later this year is the most important plan for us. It will serve as soft-power diplomacy for Taiwan."

Huang's comments come as the U.S. government tries to persuade more high-end manufacturers to set up operations in the country. The White House's supply chain review in June 2021 stressed the importance of building a competitive EV and battery supply chain, while President Joe Biden signed a bipartisan infrastructure law in December 2021 to support EV infrastructure.

"The U.S.'s view on manufacturing has completely changed following the Washington-Beijing trade war. The manufacturing sector is now the country's top priority and the Biden administration is certain to increase the local content for the EV industry. Taiwan must catch this trend to invest and manufacture there," Huang said.

Since the trade war broke out under former U.S. President Donald Trump, TAITRA has been helping suppliers shift production away from China, not only to avoid punitive tariffs on Chinese goods but also to prepare for a more polarized global market, Huang said. The council has worked closely with the AIT on this front, and helped convene the first-ever supply chain restructuring forum in Taiwan in 2019, Huang said, adding that it will host the fourth one later this year.

The council's extensive network in Southeast Asia has been vital in helping Taiwanese companies move production to countries such as Vietnam, Indonesia, Thailand and the Philippines, he said, but added that such shifts are costly and painful.

"A supplier told me that the diversification is hurting them flesh and bone," Huang said. "Many suppliers will keep their capacity in China for the Chinese market, while moving some out for the non-Chinese market. This is the best solution for them, but it is still very challenging."

The trade body also has big plans for Europe, where it already has a large network of offices.

TAITRA has sent a senior staff member to Lithuania and will soon dispatch another to the Czech Republic in preparation for establishing an office there. The two European countries donated vaccines to Taiwan when the island suffered a surge in COVID-19 infections, in defiance of Chinese objections.

"Taiwan has made new friends amid the pandemic. We will bolster our bilateral trade relations this year with the central and eastern European countries this year," Huang said, adding that TAITRA has already set up a trade showroom for Lithuania in Taipei.

Huang acknowledged, however, that the outbreak of war between Russia and Ukraine has brought some uncertainty to TAITRA's plans in the region. It has halted trade promotion activities in Russia and has been offering consultations for Taiwanese companies operating in the Russian market since the war started.

The council's staff in eastern Europe and in Ukraine have taken an active role in helping Taiwanese citizens and their families evacuate Ukraine, such as driving them or hiring buses to help them to get to the border of Poland, since the onset of the war, Huang said.

The war and subsequent sanctions on Russia will also have an impact on business, according to Huang.

"Generally speaking, the investment atmosphere in Europe will be affected. Companies will definitely take geopolitical uncertainties into account when evaluating new investments in Europe this year," he said. "The war was unexpected. The world has changed, and it's not going to go back to how it was before the war. We will try our best to promote trade in middle and eastern Europe as planned."