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Taiwan Trade Chief Urges Businesses to Overcome ‘Unnecessary Fear’ of China

by Joshua Brown
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Taiwan’s head of trading said that their chip makers will try to make as much stuff as they can in the United States. This is despite that there are some problems between Taiwan and China. John Chen-Chung Deng was visiting Washington DC with a trade group and talking to US trade leaders.

General Deng is visiting the United States at a time when people are doing extra work to protect American and Taiwanese soldiers and economies from possible dangers caused by China. President Joe Biden and Congress want to make sure that America can keep making computer chips even if ships carrying supplies from Taiwan get disrupted during a battle.

Electronic devices such as phones, electric cars and even advanced weapons need something called semiconductors to make them run. Taiwan is the source of over 90% of these more sophisticated semiconductors used throughout the world.

Military officials from the United States have been visiting different countries in Asia to encourage them to increase their defense forces. Last month, a group of people from the U.S. House of Representatives acted out a pretend attack that China would make on Taiwan and other U.S. bases in order to figure out how they can help defense forces be more prepared for any potential threats.

Deng said all these actions are in place to make sure that Chinese President Xi Jinping will never be brave enough to attack Taiwan, which China wants as its own.

“We should not say anything that is too exaggerated or might cause fear where there is no need for it,” he added.

The man said that companies from the United States in Taiwan are doing well and they’re still hiring people. He also mentioned that Taiwan is a great place to make semiconductors, as well as companies like Google and Amazon because it provides plenty of experienced workers and necessary help for businesses.

The U.S and China have been in conflict for the past two years mainly because the Chinese government got more powerful, both economically and militarily. Also, China believes that the U.S is stopping them from becoming even more powerful. On the other hand, the U.S thinks that China is trying to interfere with its internal affairs.

Taiwan and China split in 1949 after having a fight. Now they still do not communicate with each other, but they are connected through their finances (like money). The people in charge of China keep sending planes like fighter jets and bombers to fly by Taiwan, which makes it look like they want Taiwan to join them again – even if that means having a fight again.

The people in the Biden administration, Republicans, and Democrats in Congress all want to make sure the United States and Taiwan are stronger so that China won’t try to take over Taiwan.

The United States has been showing more support for Taiwan lately. But because of the U.S.’s current tax and trade policies, it’s difficult for businesses and workers from Taiwan to work in America. This is why Taiwanese leaders are asking the U.S. to make changes so that Taiwan can have stronger trading relationships with friends and partners.

Back in 1979, the United States changed who they talk to diplomatically. Before this change happened, Taiwanese people living in the U.S. used to get a special tax treaty from the U.S., so that their taxes would be less expensive. However, after the diplomatic change, this treaty disappeared meaning that Taiwanese people now have to pay full price for their taxes in both the United States and Taiwan which makes it way too expensive for many of them.

It’s a big deal that the U.S. needs to work out a tax agreement with Taiwan according to Treasury Secretary Janet Yellen and lots of important people in Congress. The Biden government also wants to give millions of dollars to build chip factories here in America so we don’t rely on other countries like Taiwan, who could be a security risk.

The Taiwanese company Taiwan Semiconductor Manufacturing Corp is building two chip factories in Arizona for a total cost of $40 billion. There is an issue of having to pay taxes twice, and before the work on the first factory starts, Deng from the Trade Office is hoping that this can be resolved. Otherwise, it’ll be a real problem once they start producing.

Taiwanese leaders want to sign an agreement with the U.S. soon that is similar to the agreements the U.S. has with South Korea and other countries. In the past, people were worried about the U.S. upsetting China if it signed an agreement with Taiwan, but Deng thinks this new trade agreement will show other countries that Taiwan can still be trusted for trading.

Deng said that this would help Taiwan not rely as much on China for their economy. He also believes the U.S. plan to make other countries stop selling advanced chips to China is good since it keeps important tech out of China’s hands.

Integrated circuits make up around one-quarter of Taiwan’s whole economy. Even though China is a big part of this, Taiwan knows it’s not smart to share its semiconductors (chips) with them because they could use those chips to build missiles that would point at Taiwan.

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