Taiwan's machinery exports: US becomes top destination amidst shifting global trade

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The United States has, for the first time in 2024, overtaken China and Hong Kong to become the primary destination for Taiwan-made machinery. This significant development was highlighted in a recent report from Taiwan's Ministry of Finance (MOF), reported news agency ANI.

According to ANI, this shift is largely attributed to China's ongoing efforts to bolster its own machinery manufacturing capabilities.

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In 2024, Taiwan's machinery exports to the US reached an impressive USD 5.8 billion, representing a 6.1 per cent increase from the previous year and accounting for 24.2 per cent of the nation's total machinery exports. In contrast, sales to China and Hong Kong saw a 1.5 per cent decline, falling to USD 5.7 billion, which made up 23.7 per cent of the total.

The MOF report further indicated a substantial trend between 2019 and 2024 as Taiwan's machinery exports to the US surged by 24.5 per cent, while shipments to China and Hong Kong dropped by 16.8 per cent.

Back in 2019, China and Hong Kong historically constituted around 30 per cent of Taiwan's machinery exports, with their share at 29.3 per cent. At that time, the US held a 19.9 per cent share, reported ANI.

While, China's diminishing share is partly a consequence of its policy to strengthen its domestic machinery industry, aiming to lessen its reliance on imported goods. Concurrently, escalating US-China trade tensions and the growing emphasis on "Made in the USA" initiatives have encouraged Taiwanese manufacturers to increasingly target the American market. This strategic pivot comes amidst a broader downturn in Taiwan's machinery sector.

According to ANI, the total machinery exports in 2024 plummeted to a three-year low of USD 24.1 billion, a 0.4 per cent decrease from 2023 and a sharp 15.5 per cent decline from the record high of USD 28.6 billion set in 2022.

Despite this, machinery remained Taiwan's fourth-largest export category in 2024, though its share of total exports reached a record low of 5.1 per cent, down from 5.6 per cent in 2023, the report added.

While outbound sales experienced a rebound of 4.3 per cent in the first half of this year compared to the previous year, the MOF stated that the continuation of this upward trend remains uncertain, as the persistent trade tensions between the US and China continues.

(With inputs from ANI)