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Taiwan Defends Trade, Currency Record Ahead of Possible US Tariffs 

Shipping containers are stacked in the port city of Keelung, Taiwan, 20 March 2025. (EPA)
Shipping containers are stacked in the port city of Keelung, Taiwan, 20 March 2025. (EPA)
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Taiwan Defends Trade, Currency Record Ahead of Possible US Tariffs 

Shipping containers are stacked in the port city of Keelung, Taiwan, 20 March 2025. (EPA)
Shipping containers are stacked in the port city of Keelung, Taiwan, 20 March 2025. (EPA)

Taiwan's central bank on Wednesday defended the island's trade and currency record ahead of possible tariffs from US President Donald Trump, saying the high current account surplus was a structural problem and Washington understood that.

Trump officials, including Treasury Secretary Scott Bessent, have said that much of the reciprocal tariff focus, to be announced on April 2, will be on 15 countries that have the highest trade surpluses, which Bessent has referred to as the "Dirty 15."

They did not name these, but according to US Census Bureau data, Taiwan is one of those 15 with the largest trade surpluses with the United States, along with countries like China and South Korea plus the European Union.

In a report to lawmakers, Taiwan's central bank noted that the island's current account surplus last year was 14.3% of GDP.

"It reflects the structural problem of the sharp increase in US demand for Taiwan's technological products and the expansion of our trade surplus with the United States. The US side understands this point of view," the central bank said.

Taiwan runs a large trade surplus with the United States, which surged 83% last year, with the island's exports to the US hitting a record $111.4 billion, driven by demand for high-tech products such as semiconductors, a sector Taiwan dominates.

"As Taiwan's trade surplus with the United States is relatively large, the risk of bilateral trade disputes between Taiwan and the United States must be carefully managed," the central bank said.

Taiwan has previously been put on a foreign exchange "monitoring" list by the US Treasury Department given its trade surplus and outsized current account surplus.

The central bank said its exchange rate policy aims to maintain an "orderly" foreign exchange market and financial stability, and that it never intended to gain an unfair competitive advantage in trade.

It also expressed concern about Trump's frequent economic and trade policy flip-flops and lack of clarity about his plans on tariffs in particular.

"Especially, the impact of the tariff increase policy is the most significant, which is detrimental to the growth of the global economy and may push up inflation," the central bank said.

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Saudi Inflation Holds Steady in May as Rents Remain Key Driver

Aerial photo of the Saudi capital Riyadh (SPA) 
Aerial photo of the Saudi capital Riyadh (SPA) 
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Saudi Inflation Holds Steady in May as Rents Remain Key Driver

Aerial photo of the Saudi capital Riyadh (SPA) 
Aerial photo of the Saudi capital Riyadh (SPA) 

Saudi Arabia’s annual inflation rate remained stable at 2.2 percent in May 2025, maintaining a pace close to the 2.3 percent recorded in April. The continued stability in prices signals a relative balance in inflationary pressures, despite ongoing increases in housing costs.

This resilience comes amid global economic volatility, reflecting the effectiveness of Saudi Arabia’s fiscal and monetary policies, particularly in controlling energy and rental prices. The monthly Consumer Price Index (CPI) saw a slight uptick of just 0.1 percent.

According to the General Authority for Statistics (GASTAT), the annual inflation rate for May was driven primarily by rising housing-related costs. Prices in the housing, water, electricity, gas, and fuel sector increased by 6.8 percent compared to the same period last year. Food and beverage prices climbed by 1.6 percent, while personal goods and services saw a 4 percent rise.

Residential rents remained the most significant contributor to inflation, continuing their upward trend and exerting substantial influence on the general index. Despite this, the Kingdom’s inflation rate remains among the lowest in the G20.

Commenting on the data, Dr. Abdullah Al-Jassar, a member of the Saudi Association for Energy Economics, told Asharq Al-Awsat that Saudi Arabia’s inflation levels remain comparatively low on a global scale. He said the current rate reflects the flexibility and discipline of the national economy, noting that price increases have been modest and largely under control.

Al-Jassar attributed this to effective government policies that have helped shield both the market and consumers from external shocks.

He emphasized that the inflation observed is a result of real economic activity rather than external disruptions or internal imbalances. One of the most effective tools in curbing inflation, he said, has been the government’s decision to stabilize local energy prices, even as global oil prices surged. Since fuel plays a crucial role in the production, transport, and distribution of goods and services, this policy has prevented cost increases from spilling over into other sectors such as food, construction, and housing.

Al-Jassar described this approach as a “smart policy” that successfully absorbed global inflationary shocks before they reached the end consumer.

Although residential rents jumped 8.1 percent year-on-year, he noted that the rise was gradual and primarily driven by strong demand and limited supply. He also pointed out that the Saudi riyal’s peg to the US dollar has helped protect the economy from imported inflation and reduce the cost of importing goods.

Increased competition, tighter price monitoring, and the growing presence of e-commerce were also cited as factors contributing to market stability and limiting price manipulation across various sectors.

Looking ahead, Al-Jassar suggested inflation could see a slight increase in the second half of 2025, potentially rising to between 2.5 and 3 percent. He attributed this potential uptick to seasonal factors or changes in global commodity prices. Additionally, if the US Federal Reserve moves to cut interest rates, this could lead to looser monetary policy in Saudi Arabia, boosting liquidity and consumption—factors that might put upward pressure on prices. However, he stressed that there are currently no signs of any sharp or unexpected inflationary surges.

In April 2025, the inflation rate stood at 2.3 percent, also led by a 6.8 percent rise in housing and related costs. Food and beverages saw a 2.2 percent increase, while personal goods and services were up 3.5 percent.

Month-on-month data showed that while May’s CPI rose by just 0.1 percent, residential rents continued to rise, helping push housing-related prices up by 0.3 percent. Actual rents for residences alone increased by 0.4 percent. Food and beverages inched up by 0.1 percent, while personal goods and services rose by 0.5 percent. Tobacco prices edged up by 0.2 percent.