00:00We're joined today by former Minister Without Portfolio and Trade Representative for Taiwan, Minister John Deng.
00:06Thank you so much for joining us today.
00:08Thank you very much for having me.
00:10I want to start with some recent news.
00:12Over the weekend, there was an interview with U.S. Trade Representative Jameson Greer,
00:15in which he said that he doesn't expect the recently announced tariff rates to be reduced anytime soon.
00:21Now, it seems to be a little bit at odds with what Taiwan President Lai Ching-da said,
00:26which is that the 20% tariff recently announced for Taiwan was only temporary,
00:31and that it would be reduced soon once a new trade deal is announced.
00:34Do you think that this 20% tariff rate will go down in the near future?
00:38I think this depends upon how much and what we can offer to the United States.
00:45One, whether we can open up our market.
00:50Second, how much investment you can put in the United States.
00:56Third, how much trade surplus you have with the United States.
01:02Of course, from Taiwan's perspective, 20% is a little bit high.
01:09And we hope we all, the society, business community, and the whole society wants to have a lower rate.
01:20That's the goal.
01:22Before you left government, as the Trade Representative for Taiwan,
01:26you actually led the negotiations on the U.S.-Taiwan Initiative on 21st Century Trade.
01:31And when these tariff, reciprocal tariffs were announced in April,
01:36actually there were ongoing negotiations for the second part of that agreement at that time,
01:41which included agricultural market access in Taiwan.
01:44And that raises the question,
01:46now that this new deal seems to be being negotiated to avoid reciprocal tariffs,
01:53what's going on with the Initiative for 21st Century Trade?
01:57And what's its relationship to this current deal?
02:01I also observed that the Trump administration pretty much already put this agreement aside.
02:10However, I'm not worried of that since this agreement was signed by leaders of both countries,
02:22was approved by both Congress, by Taiwan Parliament, Legislature, as well as by U.S. House and Senate.
02:32So this agreement is fully, has full force of an international agreement.
02:42I think it is a good agreement.
02:45I mean, 21st century, it is a good agreement.
02:48But it's not being used now.
02:52It is a separate issue we are dealing with.
02:55You've been negotiating with the U.S. on trade for a long time.
02:59I know you can't reveal too many specific details,
03:02but give us a little bit of the behind the scenes.
03:05What's it like to be in the room during these negotiations?
03:08I think from my personal experience, you are right.
03:14It is very long.
03:17I, sometimes I think I'm, in some period of time I almost live in that building.
03:29I think I respect my colleagues working for USTR.
03:38They are very well-knowledged.
03:40They are very experienced.
03:42And I think they are working for U.S. interests.
03:48They are very aggressive.
03:51But in the meantime, I also feel that they are very professional.
04:00They know that each country has its limits.
04:04They understand Taiwan has its own domestic politics we have to deal with.
04:12And they want to do an extra mile to help Taiwan.
04:27But when you're in the room, when the Taiwan team and the U.S. team are in the room together,
04:31does it ever feel tense or does it always feel very cordial and friendly?
04:36Both.
04:37Sometimes you, I don't know, I don't want to say you hate them, but it's close.
04:50Since they are very aggressive, always very aggressive.
04:55We work for both different governments.
04:59So we fight.
05:02But privately, we get along well.
05:06Then you understand that they think Taiwan is more friendly,
05:14more open to them than other of their trading partners.
05:21This is related to the personality of U.S. Americans as a whole.
05:28It's quite direct.
05:30You won't misunderstand them.
05:33So in that respect, it's also easier for us to make decisions to understand them well.
05:41Many times in the negotiation, you misunderstood the other side.
05:45But in the case with the United States, I rarely need to think secondly, say they mean differently.
06:02After these reciprocal tariffs were announced last week, everyone is now looking to this Section 232 investigation,
06:09which may put sector-specific tariffs on semiconductors, which of course are Taiwan's most valuable export.
06:18However, the deal with the European Union that recently came out,
06:21they seem to have gotten a 15% blanket tariff cap on all tariffs, including Section 232 tariffs on semiconductors.
06:29Do you think that Taiwan will be able to arrange a similar kind of tariff cap on semiconductors so that whatever the amount that comes out of this 232 investigation is, it will not exceed, say, 15%?
06:42It's not clear.
06:43It's not clear.
06:44It's not clear.
06:45It's not clear.
06:46Even on the announced information, on the public information, we already saw on the press.
06:56The purpose of that investigation is whether foreign products threaten U.S. national security.
07:04So that's the whole purpose of that exercise.
07:08We think Taiwan's semiconductor is a very special circumstance.
07:15We produce this for U.S. customers.
07:19They trust us.
07:21They trust us.
07:23We will not steal their trade secrets on their designs.
07:29They trust us can produce good quality products so that we will not affect the operation of their, say, missile system.
07:42We are not threatening U.S. national security at all.
07:48I think we are strengthening U.S. national security.
07:53And now, since TSMC already announced, already invested, and already started to produce some products there.
08:05So I think the threat to U.S. national security is even less now than before.
08:15If there is one.
08:16I don't think there is any possibility we can threat.
08:19We will threat.
08:20But now with the investment of TSMC, that imaginable threat is even less.
08:31So hopefully that the so-called threat or damage to U.S. national security is not applicable in Taiwan's case.
08:46One of the main concessions the Trump administration has seemed to have gotten out of a lot of these trade deals is large amounts of investment into the United States.
08:54So Taiwan's TSMC has already made the biggest single investment of any company in the world into the United States.
09:03But when you look at some of these recent deals, that number starts to look a little bit smaller.
09:07Several countries in the Middle East have pledged hundreds of billions of dollars, Japan 550 billion, Korea 350 billion.
09:17Do you expect that this trade deal that will be between Taiwan and the United States will include large amounts of investment in the U.S. like we've seen in these other trade deals?
09:26I do think we should invest more in the United States.
09:32I also encourage our business communities to invest more in the United States.
09:41We have these capabilities.
09:43But in the past, we all invested in China.
09:47And then later on, some of the investment moved to Southeast Asia.
09:53But in the United States, I think there is still some hesitation.
10:01But if we can use this opportunity to encourage even reluctantly move to the United States, that will upgrade Taiwan's business vision and their future development.
10:27There are some criticisms on this.
10:33Claiming invest in the U.S. will hollow out Taiwan's economy.
10:40I think there is totally no ground for that kind of accusation.
10:48The investment in foreign countries is to expand our business scope.
10:56It's getting our business more sophisticated.
11:00It's helping our business to pay more attention with their laborers, with their workers.
11:08So it is definitely positive to business and definitely positive to the country as a whole.
11:16Obviously, these trade negotiations have been very stressful for Taiwan.
11:20And a lot of these tariff actions that the U.S. has taken has been through executive power.
11:25In other words, when there's a new U.S. president in three and a half years, all of these tariffs could disappear on day one.
11:31All of these actions could be overturned.
11:34And I'm just wondering, you know, how does all of this constant cycle of trade tensions affect the long-term relationship between Taiwan and the United States?
11:44Trump's approach looks like, I think, caused many dissatisfactions to foreign countries, including Taiwan.
12:01But we also noticed that he was elected by the United States.
12:07And the imbalance was very well seen.
12:13Everybody knows there are imbalances in the United States.
12:17As we just discussed, a huge government deficit, huge trade deficit.
12:26Those need to be addressed.
12:29Even without President Trump as another president,
12:34they still have to face to correct this imbalance.
12:42So to Taiwan, it is very clear.
12:45I mean, to our advantage, we have to work with the United States.
12:49It's to our advantage.
12:51I often quote this traditional Chinese saying,
12:58we may lose some battles, but we win the war.
13:03And do you think Taiwan is winning the war?
13:06Of course.
13:08See how our economy, see how much we export, see very low unemployment rate, see our national income.
13:19We win the war.
13:21OK, Minister Deng, thank you so much for joining us today.
13:23I really appreciate it.
13:24Thank you very much for having me.
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