Mumin Chen
Interview/ Mumin Chen, representative of the Taipei Economic and Cultural Centre, New Delhi
The darker side of US President Donald Trump’s tariff policies has unexpectedly brought a silver lining for India, which continues to occupy a central place in one of the most pressing debates of our time: the future of global supply chains. Shifting US policies have compelled Taiwanese companies not only to export to alternative markets but also to invest in safer, more attractive destinations for semiconductors, cybersecurity and artificial intelligence.
Mumin Chen, the representative of the Taipei Economic and Cultural Centre in New Delhi, highlights the broader context of global disruption, from the US-China trade war and the Russia-Ukraine conflict to rising tensions in the Indo-Pacific, and how these developments are creating space for partners like India to play a growing role in the region. Excerpts from an interview:
Q/ What is your perspective on the US-China trade war? How has it affected Taiwan’s economy?
A/ Both the US and China are very important trade partners for Taiwan. Therefore, any actions taken by the US against China, and China’s responses, will have a major impact on Taiwan. Nearly a decade ago, Taiwan had a serious trade dependency on China, with almost 40 per cent of its exports heading there and a significant portion of Taiwanese business investment based in China. However, the situation has changed markedly, with those figures dropping substantially.
This year, Taiwan’s exports to the US have surpassed its exports to China. That marks a huge shift. Increasingly, our exports are focused on the semiconductor and electronics sectors. Therefore, we now care more about our trade relations with the US than with China, and we are monitoring developments very closely. Trump’s policies have accelerated this shift. His “invest in the US” approach has led Taiwanese companies—including TSMC (Taiwan Semiconductor Manufacturing Company)—to invest directly in the US rather than merely exporting there. In future, Taiwan will rely on both investment and trade to maintain market share and technological advantage.
Q/ How have US tariffs on Chinese goods altered supply chains and trade flows? How is Taiwan’s business community adapting?
A/ The US-China trade war has had a huge impact on Taiwanese companies that were heavily invested in China and dependent on the US market. Following Covid and China’s economic slowdown, coupled with its domestic political issues, Taiwanese companies no longer view China as a paradise. This trend is unlikely to reverse. Companies will gradually reduce their dependence on China, relocate elsewhere and focus on emerging markets like India.
Rebuilding supply chains is a work in progress. Taiwanese companies have systematically pulled out from China and relocated to countries such as Vietnam, Indonesia and India. Taiwan’s trade dependence on China has dropped significantly in recent years. For example, iPhones sold in Taiwan are now made in India. Taiwanese companies investing in India are less affected by US tariffs if their market is India. Many said they felt safer in India than in China.
Some analysts suggest that US pressure through trade and tariffs on China has compromised Taiwan’s security.
A/ The main focus remains on trade, tariffs and Taiwan’s security. From what we know about the phone call between President Trump and President Xi Jinping, including discussions related to the TikTok deal, Taiwan was not even mentioned. However, when it comes to the US commitment to Taiwan’s security, we are watching closely what the US and China are talking about. The US has been Taiwan’s most important security supporter for decades. Still, one thing is clear: we cannot rely on a single country. We need to build alliances with others, such as our neighbours Japan and the Philippines, and increase security cooperation in the region with partners like India.
Q/ How do you assess India’s position in the Indo-Pacific?
A/ The concept of Indo-Pacific, when it came out during the first Trump administration, highlighted the close ties between Indian Ocean states and Pacific Ocean states. Not using the word anymore does not mean it is no longer important. Taiwanese shipping companies now have direct shipping routes to India and the Middle East. Trade connections have strengthened, and Taiwan-India trade has doubled over the past five to six years. So, the Indo-Pacific connection is thriving regardless of changing terminology.
Undeniably, India’s position in the Indo-Pacific is important, but areas like the South China Sea require more focus. Located between the Pacific Ocean and the Indian Ocean, the South China Sea and its security is vital to India’s interests—especially given India’s consistent emphasis on a free and open Indo-Pacific, which is rule-based, not power-based.
Q/ How has the role of the Quad evolved in the Indo-Pacific region?
A/ When the Quad was first proposed, many believed that it would eventually develop into a military alliance against China. But that expectation did not materialise. Even the Indian government clarified that the grouping is not anti-China. Taiwan is not a member of the Quad, so whether the Quad will become a real alliance or not, we have no role. But we have also noticed that the relationship among Quad members has changed in recent years, particularly after Trump became president. Taiwan should not depend solely on the Quad. This is very unrealistic. Strengthening our self-defence and resilience is more important.
Q/ India and Taiwan are collaborating in the semiconductor industry. What is the future?
A/ Developing the semiconductor industry requires going step by step: chip design, testing, packaging and eventually manufacturing. Taiwan-India cooperation is concentrated on talent. India needs engineers and Taiwan recruits Indian students and engineers to study and work in Taiwan. There is also great potential in cyber and AI, as both Taiwan and India face major cyber security challenges and can exchange technology and experiences. When you develop AI, you need a very big database. Taiwan has advanced chips and technology, while India has its huge database, and combining strengths can benefit both sides.
Over the past 30 years, India and Taiwan have made significant progress in areas like science, technology and education. The next step should be an economic partnership agreement. Since India has recently signed FTAs with partners such as the UK, EU and Australia, we hope New Delhi will also consider a free trade agreement with Taiwan.