UN recognizes Taiwan as biggest winner from US-China trade war

UN report lists Taiwan as top beneficiary of US-China trade war

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(Chart from UNCTAD report)

(Chart from UNCTAD report)

TAIPEI (Taiwan News) — A report by the UN Conference on Trade and Development (UNCTAD) released on Tuesday (Nov. 5) concludes that Taiwan is the biggest beneficiary of the U.S.-China trade war, inadvertently recognizing Taiwan as a separate country from China while still paying lip service to Beijing.

On Tuesday, the UNCTAD released a report titled "Trade and Trade Diversion Effects of United States Tariffs on China," which decried U.S. tariffs on China as "economically hurting both countries." However, the organization acknowledged that the trade diversion effects have increased imports from nations not directly engaged in the trade war and brought "substantial benefits" to Taiwan, Mexico, and the European Union.

Of the countries listed in the report, Taiwan was singled out as the top beneficiary of the trade diversion effects of U.S. tariffs leveled against China. In the first half of 2019, Taiwan saw an increase of US$4.2 billion (NT$127.8 billion) in exports to the U.S., according to the report.

In terms of industry sectors, the report stated that a high percentage of increased exports to the U.S. came in the form of office machinery and communication equipment. China, which had previously dominated the market in office machinery, saw a drop of US$10 billion during the first half of the year, with Taiwan taking up US$2.8 billion of the US$4.5 billion in trade diversion effects.

China also saw a drop of US$5 billion in communication equipment, with Taiwan cashing in on US$491 million in sales to the US in the first half of 2019. Vietnam was the biggest winner in this sector, with US$1.1 billion in sales made to the US over that period.

Taiwan's third-largest export to the U.S. as a result of the trade war is electrical machinery at US$287 million, while the EU led the pack in this sector with exports of US$422 million. Metals and ore were Taiwan's fourth biggest export at US$205 million, while Mexico cashed in the most in this sector with exports of US$373 million.

Throughout the report, the UN treats Taiwan as a separate country with its own economy that is clearly not subject to tariffs directed at China. Yet, for fear of upsetting China, the second-largest contributor of cash to the organization at $367.9 million (12 percent of total), the report awkwardly lists Taiwan as "Taiwan Province of China."

After the report was released, Taiwanese Finance Minister Su Jain-rong (蘇建榮) said that the biggest observable impact of the trade war on Taiwan is Taiwanese companies' movement away from a red supply chain in China to a non-red supply chain in Taiwan, reported CNA. He said this trend should continue, which in the long run is a positive development for Taiwan.


(Screenshot of chart from UNCTAD report)