The Impact of American Political Trends on Taiwan's Banks, and Possible Countermeasures

2017/12/1 上午 12:00:00

American growth has remained stable in recent years, and various stock market indices have reached new highs. Despite the good economy, labor demand from traditional manufacturing has remained sluggish. Thus, in the hopes of further boosting American companies’ role in local economic development, US President Donald J. Trump has issued major policies on foreign investment, tax reform, free trade, infrastructure, and energy. After these policies come into effect, all sectors must pay attention to fiscal balance, which will maintain the stability of the dollar against other currencies.

Geopolitically, Trump is friendly to Canada, but remains wary of illegal Mexican immigrants. The wall between the US and Mexico, which had been mentioned in previous elections, and border adjustment taxes, will be difficult to truly implement, but other policies including immigration and taxation are still expected to limit American companies’ reliance on Mexican imports. The hope is that they will bring manufacturing back home to create jobs and broad-based economic opportunities. In Asia, North Korea’s nuclear and ballistic missile policies have not improved, but the US and UN have gradually cut its aid through diplomatic, economic, and anti-money laundering/counter financing of terrorism (AML/CFT) channels, helping open up dialogues between the North and South, and even multilaterally. For the Middle East, the situation with Syrian rebels and the Islamic State (ISIS) has gradually eased, but after the US recently recognized Jerusalem as the Israeli capital, the Palestinian situation heated up somewhat.

On the economy, the US has proposed new trade and industrial policies. Taiwan can consider integration with its existing “5+2” industrial policy. These main industries include manufacturing (the Great Lakes region and Midwest), biotechnology and medicine (Northeast and Silicon Valley), oil refining and natural gas (South), and venture capital (Silicon Valley and the Northeast). Taiwan’s banking industry can also consider whether these areas hold business opportunities for new strategies and even business bases.