China's Record Trade Surplus Strains U.S.-Taiwan Relations
China's trade surplus is set to hit a record $1.2 trillion this year, boosted by increased exports since the start of the U.S.-China trade war. However, this has also led to overproduction and factory-gate deflation. Meanwhile, the U.S. is pushing Taiwan to move its semiconductor industry Stateside, a move Taiwan finds challenging due to its reliance on local technology and supply chains.
Vice Premier Cheng Li-chiun led Taiwanese negotiations with the U.S., seeking fairer tariff rates. However, Taiwan lacks allies in the White House, with many Trump-era China hawks replaced by younger isolationists. The U.S. is pressuring Taiwan to relocate its semiconductor industry, but this is practically impossible due to local dependencies.
China's President Xi Jinping is reportedly lobbying Trump to oppose Taiwanese independence. Meanwhile, China is upgrading its World Trade Organization status from 'developing' to 'developed', reflecting Xi's domestic priorities. The Chinese Communist Party is set to hold the Fourth Plenum from Oct. 20 to 23, likely focusing on rebalancing China's economy. The U.S., on the other hand, is expanding its trade blacklist of Chinese firms to target China's tech ecosystem.
China's trade surplus is soaring, but so are internal pressures. The U.S. is pushing Taiwan to relocate its semiconductor industry, while China is upgrading its WTO status and preparing for economic rebalancing. Meanwhile, the U.S. is tightening its trade restrictions on China.
