On June 18th, the Taiwan Institute for National Policy Studies held a seminar on “US-China Trade and Technology War and the G7 Summit,” where scholars and experts analyzed the impact on the international situation.
The President of the Taiwan Institute for National Policy Studies, Tian Hongmao, stated that the seminar’s analysis of the US-China trade and technology war and the G7 issues implies that the topics involve the overall international situation. The summit not only discussed common concerns about economic security but also highlighted regional conflicts as a focal point of the meeting. With the war between Russia and Ukraine ongoing for over three years and new conflicts erupting in the Middle East on the eve of the summit, Israel and Iran’s influence in the Middle East plays a significant role, with various issues interplaying.
Chief economist of Taishin Financial Holdings, Li Zhenyu, mentioned that the percentages of tariffs discussed in the US-China-London negotiations were 30% for China and 10% for the UK. It is anticipated that negotiations in the future will likely fall within this range. The London negotiations aimed to manage risks and create leverage, illustrating that global trade negotiations are about real power and pressure.
Li Zhenyu suggested that Taiwan should adopt the “Two Ns” strategy: Big Number and Be the Number One. The former entails providing significant investment commitments to the US, while the latter involves taking the initiative to become the first country to negotiate with the US, thus gaining leadership. As Taiwan is the largest supplier of advanced semiconductors to the US, the government must assist the semiconductor industry in playing a more critical role in global supply chain reorganization actively, positioning itself as a strategic point of attack in the high-tech supply chain.
Professor Cai Weizhe, a distinguished professor and department head of finance at Sun Yat-sen University, mentioned that in the face of China’s rare earth card and Russia’s challenge to the international economic order, the G7 may propose three measures: constructing diversified critical mineral supply chains, formulating a roadmap for diversifying rare earth procurement to reduce strategic reliance on China; establishing digital governance standards to control technological standards and governance norms, and deepening the Indo-Pacific economic framework to effectively limit China’s economic influence in the region.
Senior researcher Wang Guochen from the Chinese Economic Research Institute’s first research institute pointed out that the US has equal tariff negotiations, rare earth substitution, and global supply chain restructuring as niche strategies. The Chinese Communist Party supports domestic technology independence, but externally tries to forge alliances, seeking long-term competition with the US. However, these measures exacerbate economic stagnation and overcapacity output. The US’s technology restrictions on China, along with Washington’s request for the EU to limit its economic and trade links with the Chinese Communist Party, demonstrate the US’s intention to establish an economic encirclement of China.
Professor Zheng Zhengbing from Yunlin University of Science and Technology’s Department of Finance stated that Taiwan should actively consider constructing resilient national defense. Compared to European countries, which allocate 5% of GDP to defense spending, Taiwan’s economic development is ongoing, with its national debt-to-GDP ratio standing at only 20%, much lower than the US and Japan’s ratios exceeding 100%. In the future, the government should increase defense budgets and expand military procurement to demonstrate its determination to self-help defense.
Former US Representative to the United States and senior adviser to the Institute for National Policy Studies Gao Shutai stated that the G7 should continue to play a role in leading international finance, economy, energy, technology, and AI supply chain resilience issues while setting governance rules. It should also strengthen trust and collaboration with “Trump 2.0” through internal reforms to leverage the energy to address global issues.
Dong Liwen, Executive Director of the Asia-Pacific Peace Research Foundation, mentioned that this year’s G7 summit will also focus on the issue of jointly countering communism. In last year’s G7 summit, out of the five significant consensuses reached, four targeted the Chinese Communist Party, emphasizing concerns about the CCP’s sustained non-market policies and practices that distort markets, lead to overcapacity, and weaken economic resilience and security. For the first time, there is also support for Taiwan to participate meaningfully in international organizations, endorsing Taiwan’s participation as an observer or guest in technical meetings of health organizations.
Dong Liwen added that this year’s initial consensus at the G7 summit is to jointly establish a strategic mechanism to address risks in the critical mineral supply chain, enhance early warning mechanisms, identify shortages of rare earths and critical minerals, and collectively promote diversification in extraction, processing, manufacturing, and recycling processes to show the G7’s high level of vigilance and determination in response to China’s rare earth policies in the mid to long term.
Professor Fan Shiping from National Taiwan Normal University’s East Asian Studies Department mentioned that the early departure of Trump from this year’s G7 significantly diminished the summit’s results. It remains to be seen whether countries will purchase a significant amount of US-manufactured weapons to reduce their trade surplus with the US. Trump was expected to meet with Zelensky to advance the Russia sanctions legislation, together with a new round of European sanctions aiming to pressure Russia into ceasing hostilities and engaging in broader negotiations.
Researcher Lin Zhengyi from the Institute of European and American Studies at the Academia Sinica responded that regarding the Middle East conflict, Trump only signed documents supporting Israel and opposing Iran’s possession of nuclear weapons at the summit. The G7 will continue to focus on international trade and market stability. Both the G7 and NATO members have increased their defense budgets, with Canada’s new Prime Minister, Kani, even advancing the goal of reaching 2% of GDP by 2026, surpassing it by 2030. Faced with powerful security threats, Taiwan must increase defense budgets and infrastructure construction as a necessary measure.
Lin Zhengyi mentioned that President Biden, jointly with Japan and other countries, internationalized the Taiwan Strait issue during his term, with the G7 focusing on the Taiwan Strait issue for three consecutive years since the 2022 German summit. This move further internationalizes the Taiwan issue, as seen with the G7 expressing concern over China’s sudden military drills during their Ministerial Meeting in April, expecting that the G7 will invite non-member countries to support their stance.
Lastly, Tian Hongmao stated that the current international situation is constantly evolving, and in the face of the new Cold War situation, the US’s policy of confronting China remains an international trend. Taiwan should intensify its diplomatic resource investment to develop mutually beneficial relations with countries such as the G7.
Tian Hongmao expressed that Trump questioned renowned institutions like Harvard for neglecting US national interests over the years, which aroused concerns among the Republican Party about left-leaning trends in elite American universities. It is widely recognized that the Chinese Communist Party exploits liberal academic institutions in the US, and there is a discernible pattern in its development that requires objective analysis.