Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
With a population of 23.6 million, Taiwan is a thriving democracy with a vibrant market economy. In 2020, Taiwan’s GDP grew by 2.98 percent. The unemployment rate was 3.85 percent and the labor participation rate was 59.15 percent.
As of December 2020, Taiwan was the world’s fifth-largest holder of foreign exchange reserves and was ranked thirteenth in gold reserves, with holdings of $483 billion and 423.6 metric tons respectively.
The United States and Taiwan have a long-standing and vibrant trade relationship. In 2020, the United States and Taiwan transacted $106.2 billion of trade in goods and services, composed of $39.4 billion in exports and $66.7 billion in imports, resulting in a goods and services trade deficit with Taiwan of $27.3 billion.
The United States is Taiwan’s second largest trading partner, accounting for 13.2 percent of total trade and 11.5 percent of Taiwan imports. China is Taiwan’s largest trading partner, accounting for 26.3 percent of total trade and 22.2 percent of Taiwan’s imports in 2020. In terms of total trade, other major Taiwan trading partners include Japan (10.9 percent), the European Union (8.2 percent), and Hong Kong (7.9 percent).
U.S. Goods Trade
In 2020, Taiwan was the United States’ 10th largest goods trading partner, outranking markets such as the Netherlands and Italy, with $83.9 billion in two-way goods trade.
Taiwan was the United States’ 9th largest goods export market at $30.4 billion in 2020, an increase of 5.2 percent over 2019, and accounting for 2.1 percent of U.S. goods exports. Top U.S. goods exports included machinery ($6.1 billion), electrical machinery ($4.9 billion), chemicals ($3.6 billion), mineral fuels ($3.4 billion), and optical and medical instruments ($2.7 billion).
Taiwan was the United States’ eighth-largest agricultural export market in 2020, with exports totaling $3.3 billion, a 9 percent decrease over 2019 ($3.62 billion). Top U.S. agricultural exports included soybeans ($604 million), beef and beef products ($552 million), wheat ($311 million), fresh fruit ($197 million), and corn ($179 million).
Regarding imports, Taiwan was the United States’ 9th largest supplier of goods imports. The island is not a major supplier of agricultural imports to the United States.
U.S. Services Trade
In 2020, two-way trade in services with Taiwan was $15.1 billion. U.S. exports of services to Taiwan were roughly $11 billion, a 15.5 percent decrease over 2019. Top U.S. services exports included intellectual property (industrial processes), transport, and travel.
Exactly 91,007 Taiwan travelers visited the United States, in 2020, and spent over $419 million on travel and tourism- related goods and services.
In 2020, Taiwan was the seventh-largest source of foreign students pursuing higher education in the United States. The number of students reached 23,724, a 1.5 percent increase over 2019, and generated an economic impact of $915 million.
U.S. imports of services from Taiwan totaled approximately $6.2 billion in 2020, a 15.2 percent decrease from 2019.
Taiwan’s total stock of FDI in the United States was $ 16.2 billion in 2019, up 14.1 percent from 2018. This investment supported 19,000 U.S. jobs. Taiwan’s foreign direct investment in the U.S. is led by electronic components, business machines, communications, software and IT services, semiconductors, and transportation.
In 2019, the total stock of U.S. foreign direct investment (FDI) in Taiwan was $17.35 billion, a 4.7 percent increase over 2018. The United States’ direct investment in Taiwan is led by manufacturing, wholesale trade, and finance and insurance.