As US and China battle over trade tariffs, Taiwan’s underdog city waits patiently for its day
- Taiwanese manufacturers turn away from China and back to Taoyuan
- Suppliers to electronics giants build capacity to beat tariffs
One of the biggest beneficiaries of the trade war between the United States and China may turn out to be a gritty Taiwanese town called Taoyuan.
A former Japanese enclave to the west of Taipei, Taoyuan had long suffered as local businesses shifted factories to the mainland to benefit from cheap labour and globalising trade. But as tensions between the world’s two largest economies escalate, Taiwan’s biggest technology firms are moving some production back home and many are turning to the city of 2 million on the northwestern coast.
The trend may have accelerated after US President Donald Trump signalled he is minded to push ahead with increased tariffs against China.
Taoyuan is an hour by road from Taipei and hosts the island’s primary international airport. It is a popular destination as the manufacturing powerhouses behind the world’s electronics industries scour the globe for alternatives. The moves threaten to splinter a decades-old supply chain, in which Taiwanese companies assemble devices in Chinese bases for the likes of HP and Dell to label their own.
From iPhone assembler Pegatron to laptop maker Compal Electronics, they are now preparing for an end to an arrangement that has served them well since the 1980s.