Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
With a population of 23.6 million, Taiwan is a thriving democracy with a vibrant market economy. In 2019, Taiwan’s GDP grew by 2.71 percent. The unemployment rate was 3.73 percent and the labor participation rate was 59.17 percent.
As of December 2019, Taiwan was the world’s fifth-largest holder of foreign exchange reserves and was ranked the eleventh of gold reserves, with holdings of $478 billion and 423.6 metric tons respectively.
The United States and Taiwan have a long-standing and vibrant trade relationship. In 2019, the United States and Taiwan transacted $104.7 billion of trade in goods and services, composed of $42.3 billion in exports and $62.4 billion in imports, resulting in a goods and services trade deficit with Taiwan of $20.1 billion.
The United States is Taiwan’s second largest trading partner, accounting for 13.2 percent of total trade and 12.2 percent of Taiwan imports. China is Taiwan’s largest trading partner, accounting for 24.3 percent of total trade and 20.1 percent of Taiwan’s imports in 2019. In terms of total trade, other major Taiwan trading partners include Japan (10.9 percent), the European Union (9.7 percent), and Hong Kong (6.7 percent).
U.S. Goods Trade
In 2019, Taiwan was the United States’ 10th largest goods trading partner, outranking markets such as the Netherlands and Italy, with $85.5 billion in two-way goods trade.
Taiwan was the United States’ 14th largest goods export market at $31.2 billion in 2019, an increase of 2.1 percent over 2018, and accounting for 1.9 percent of U.S. goods exports. Top U.S. goods exports included machinery ($5.6 billion), electrical machinery ($4.5 billion), mineral fuels ($4.4 billion), aircraft ($2.7 billion), and optical and medical instruments ($2.2 billion).
Taiwan was the United States’ seventh-largest agricultural export market in 2019, with exports totaling $3.6 billion, a 10 percent decrease over 2018 ($4 billion). Top U.S. agricultural exports included soybeans ($676 million), beef and beef products ($567 million), wheat ($324 million), fresh fruit ($255 million), and corn ($227 million).
Regarding imports, Taiwan was the United States’ 13th largest supplier of goods imports. The island is not a major supplier of agricultural imports to the United States.
U.S. Services Trade
In 2019, two-way trade in services with Taiwan was roughly of $18.5 billion. U.S. exports of services to Taiwan were of about $10.5 billion, a 1.04 percent increase over 2018. Top U.S. services exports included intellectual property (industrial processes), transport, and travel.
Exactly 499,520 Taiwan travelers visited the United States, in 2019, and spent over $2.3 billion on travel and tourism related goods and services.
In 2019, Taiwan was the seventh-largest source of foreign students pursuing higher education in the United States. The number of students reached to 23,369, a 4.1 percent increase over 2018, and generated an economic impact of $902 million.
U.S. imports of services from Taiwan totaled approximately $8 billion in 2019, a 2.7 percent decrease from 2018.
Taiwan’s total stock of FDI in the United States was $14.1 billion in 2018, up 24.7 percent from 2016. This investment supported 14,100 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 2018, the total stock of U.S. foreign direct investment (FDI) in Taiwan was $17.53 billion, a 2.9 percent increase over 2017. United States’ direct investment in Taiwan is led by manufacturing, wholesale trade, and finance and insurance.