The vast majority of members of the American Chambers of Commerce in Taiwan stated that despite the recent escalation of hostilities between China and Taiwan, trade has not been significantly disrupted.
The recent military drills by China near Taiwan, according to Andrew Wylegala, president of AmCham Taiwan, have not had any “appreciable impact” on 77% of respondents’ businesses.
After Nancy Pelosi, the speaker of the US House, visited Taiwan, military drills were started despite repeated requests from China to stop them.
Despite being a self-governing democracy, Beijing views Taiwan as part of its territory and views the island as a province that has gone rogue.
Although there hasn’t been a “panic” or a “exodus” of businesses from Taiwan, Wylegala noted that nearly half of its citizens anticipate “some type of dislocation and interruption” as China continues its military exercises.
According to Wylegala on CNBC’s “Capital Connection,” there has been “no panic in the short term, but an acceptable degree of concern going forward.”
Just a few days following Pelosi’s visit to Taipei, AmCham Taiwan conducted a survey of its 529 member organisations from August 8 to August 17.
17% of study participants reported that their business had already been affected, and a third of them also mentioned higher shipping or insurance costs in addition to supply chain delays.
According to AmCham Taiwan, 46% of the businesses questioned anticipate that China would boost its military activity between 2022 and 2023, which will have an impact on their commercial operations. The other respondents either don’t know or don’t think they will be impacted. When asked what specific “spectrum of threats” they were concerned about, the business association reports that respondents mentioned the following: restrictions or barriers on the island’s periphery; travel bans; boycotts; and “sanctions, travel bans, boycotts, and embargoes against Taiwan products and people.”
U.S.-Taiwan Trade Talks
The two nations decided on Wednesday to start talks on a trade and economic initiative as the United States continues to increase its support for the island in light of growing concerns with China.
There is no information on the potential for a free trade pact, which Taiwan has been advocating.
Wylegala claims that the current hostilities have made a bilateral trade agreement more compelling, and that Taiwan “has done a wonderful job as a partner of the U.S.”
Wylegala claims that although the June announcement of the U.S.-Taiwan Initiative on 21st-Century Trade is “not a free trade agreement per se,” it is nonetheless a “stepping stone.”
“There were no active economic debate channels four years ago. Four different agreements are currently in effect, and more are pending, he added.