Taiwan's export machinery sector experiences a notable dip, hitting an all-time low of 5.1%, according to a recent report.
In the past few years, there has been a significant change in the landscape of Taiwan's machinery exports, with a noticeable decline in shipments to China and a corresponding increase in exports to the United States.
- Decline in Taiwan-China Trade
China's share of Taiwan's total semiconductor machine exports has dropped below 30%, a significant decrease from previous years. This decline can be attributed to Chinese dumping in the international market and the ending of preferential tariffs for Taiwanese machinery. From 2019 to last year, total machinery shipments to China, including Hong Kong, dropped 16.8% in terms of value.
- Growth in Taiwan-US Trade
In contrast, Taiwan's machinery exports to the US have seen a significant increase, surpassing China for the first time over the past five years in terms of value. Taiwan's machinery exports to the US increased 24.5% over this period. This growth can be attributed to increased US demand and favorable trade policies, as well as the continued expansion of Taiwan's electronics and information and communications technology products.
- Geopolitical and Industrial Factors
The decline in Taiwan-China trade and the growth in Taiwan-US trade are influenced by several economic, geopolitical, and industrial factors. Rising political tensions between Taiwan and China, along with US-China trade disputes and tariff policies, have caused Taiwan-based machinery exporters to diversify their markets. Meanwhile, China's aggressive increase in domestic machinery production capacity has reduced reliance on imports from Taiwan.
- Taiwan's Export Growth Strategy
Taiwan's overall export structure remains strong, with a 33.7% year-on-year export increase as of June 2025, driven by electronics and higher-value machinery products tailored to advanced manufacturing and tech industries, especially in the US and other Western markets.
- China's Reduced Imports and Increased Imports from Other Sources
Despite China’s high trade surplus and export growth, its imports from Taiwan, especially in machinery, have not matched overall growth trends due to China's push to strengthen its own industry. Meanwhile, Taiwan redirects those machinery exports toward the US market, where demand for advanced machinery is growing, partly spurred by US infrastructure investments and reshoring initiatives.
In summary, the key trends are:
- Political and trade tensions have led to a reduction in exports to China and an increase in exports to the US.
- China's industrial capacity growth has reduced its reliance on imports from Taiwan.
- US trade policies and demand have led to increased exports to the US.
- Taiwan's export growth strategy has led to a shift in exports from China to the US.
These dynamics reflect broader regional industrial shifts and geopolitical influences shaping trade flows in the high-tech and machinery sectors. The outlook for the machinery sector remains uncertain due to continuing US-China trade tensions and geopolitical conflicts. Despite the decline, machinery remains the fourth-largest export category for Taiwan.
- As a response to China's reduced imports, Taiwan has found new opportunities in the finance and business sectors by altering its machinery export strategy, focusing on higher-value machinery products aimed at advanced manufacturing and tech industries, specifically in the US and other Western markets.
- The growth in Taiwan's machinery exports to the US, notably surpassing China in terms of value over the past five years, can be directly linked to the continuous expansion of Taiwan's electronics, finance, and Information and Communications Technology (ICT) products, which are significantly boosted by favorable trade policies and increased US demand.
