Kristy Hsu, Director of the Taiwan ASEAN Studies Center (TASC) at the Chung-Hua Institution for Economic Research (CIER), pointed out that while Taiwanese manufacturers have performed well in the ASEAN market in recent years, the “Rush Order Effect” driven by the United States in the first half of the year will gradually fade in the second half, and some industries are already facing headwinds. Although ASEAN is a key supply chain region for the U.S. to reduce its dependence on China, with Foreign Direct Investment (FDI) reaching US$230 billion in 2023, four major uncertainties remain beyond tariffs.
First, the U.S. may initiate a Section 301 investigation to determine unfair trade practices. Second, if the Section 232 investigation is extended to semiconductors or electronic products, it will cause a significant impact. Third, rules of origin are loosely regulated; for example, Vietnam could be subject to anti-dumping or punitive measures. Fourth, there is a risk of export controls; for instance, if Malaysia does not strictly regulate AI chips, it could affect supply chain stability.
New Opportunities: FTAs and the “China+N” Strategy
Director Hsu also emphasized that new opportunities are emerging. Taiwanese businesses can break through market barriers via existing Free Trade Agreements (FTAs) in ASEAN and produce key components locally, thereby enhancing supply chain resilience. Furthermore, a “China+N” strategy can help Taiwanese firms establish closer cooperation with the U.S. and other markets, while capitalizing on emerging trends such as the green transition, data centers, and new international standards.
China Relinquishes WTO Special Treatment, Signaling Three Key Points
Meanwhile, Chinese Premier Li Qiang announced during the United Nations General Assembly that China would no longer seek new “Special and Differential Treatment” (SDT) in WTO negotiations. Director Hsu noted that while this move has a limited impact on China’s economic interests, it carries three significant implications. First, it demonstrates a willingness to assume the responsibilities of a major economic power. Second, it sends a message of goodwill to other developing nations, signaling that China will not compete for resources with the countries of the “Global South.” Third, it serves as a response to the challenges of applying to join the high-standard free trade agreement, the CPTPP, expressing a determination to enhance its international commitments.
Director Hsu analyzed that China’s emphasis on voluntarily relinquishing SDT is intended to shape its image as a “responsible major power,” creating a sharp contrast with U.S. reciprocal tariff policies. The U.S. continues to impose high tariffs on the poorest countries, such as Laos and Bangladesh, which has broken the WTO’s long-standing principle of preferential treatment. The policies of major powers are reshaping the global economic and trade landscape, and Taiwan must carefully assess the impact on its supply chains and regional cooperation and adjust its response strategies accordingly.
Author: CIER Editorial Team
Date: September 25, 2025