Taiwan Should Open Its Eyes to US Bad Samaritans Kicking Away the Ladder

Former U.S. President Donald Trump, who is vying for the 2024 presidency, told Fox News that “Taiwan took — smart, brilliant — they took our [semiconductor] business away. We should have stopped them. We should have taxed them. We should have tariffed them.”* In response to media inquiries, Chen Chien-jen, the head of Taiwan’s executive branch, could only muster an awkward “No comment.”

As staunchly pro-U.S. as the people of Taiwan are, even they would probably be horrified to hear this kind of talk and happy if Trump were to fail in his reelection bid; otherwise, not only would Taiwan not be able to enter the Indo-Pacific Economic Framework, but it would also face punitively high tariffs from the U.S.

As a shrewd and successful businessman, Trump could not possibly be unaware that the success of Taiwan’s semiconductor industry is due to Americans’ unwillingness to put in the hard work, and that paying an arm and a leg to retain the technology and funds needed for high-margin designs and brands is the only opportunity for Taiwan to enter this tough industry. No one could have imagined that the innovative foundry business model would develop into what it is today. This was the fruit of decades of Taiwan’s hard work and sweat, so how could it have been stolen from the U.S.? For the sake of the election, Trump has to throw some red meat to the masses, but if this type of language is used too much and for too long, it will come to be seen as the truth, and it should not come as a surprise if it gets Taiwan into hot water one day.

Chen’s response, however, came as a surprise. He could have achieved a significant payoff with very little effort if he had responded, “We understand that the United States is in the middle of its campaign, and the speeches made by those who want to run for office do not quite match the facts that we know.” But simply remarking “No comment” has more in common with a response from Taiwan’s foreign affairs department than what one might expect from the head of an entire administrative team. Of course, it is completely understandable that the Democratic Progressive Party, which blindly follows the U.S. in all matters, should be unable to respond appropriately when it encounters such a difficult issue.

In the 1950s, a popular theory of economic development — “dependency theory” — emerged in Latin America, which was formerly colonized by great powers. The theory was that there were two types of countries in the world: core countries, and periphery countries. The core countries controlled the world economy and engineered unfair trade terms so that the surplus production of the periphery countries was continuously funneled to the core countries through trade prices ostensibly determined by the market. If the periphery countries and regions did not break their economic ties with the core countries, they would forever retain their status as peripheral and dependent economies and would never be able to grow and develop.

However, from the 1970s onward, the “Four Asian Tigers” started breaking the spell, able to achieve rapid growth and development with fairly liberal trade policies, despite their dependence on the core countries. Neoliberalism gained strong empirical support, and dependency theory needed not just to be revised, but to be gradually abandoned by mainstream academia.

However, neoliberalism still faces continued international challengers. One of the most famous is Ha-Joon Chang, a South Korean scholar who teaches at Cambridge University. Two of his works have been translated into Chinese and published in mainland China and Taiwan: “Kicking Away the Ladder: Development Strategy in Historical Perspective,” and “Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism,” which unveil the mystery of free trade with detailed historical information. They accuse rich countries of only promoting free trade enthusiastically when their economies are leading the world and free trade is most beneficial to them, failing which, they will obstruct it. It was the same from the Netherlands and Belgium in the early days to Great Britain later on, and even the U.S.

And today, we can see that current international developments are proving how “Bad Samaritans” are kicking away the ladder. Taiwan’s 2024 candidates from all parties should keep their eyes open and prepare countermeasures!

The author, Du Zhenhua, is a professor at the Chinese Culture University of Taiwan and a director of the Great China Money and Finance Association, Taiwan. Source: Taiwan’s China Times

*Editor’s Note: This quote, though accurately translated, could not be verified.