What happens if the United States one day came to lose objects as basic as screws? This possibility cannot be ruled out, while Donald Trump’s aggressive commercial policy is suffocating Taiwan, the first US business supplier.
The island is not only the homeland of semiconductors, but it is also the kingdom of screws, nails, nuts and bolts. Even in this fixing industry it was based on the 1950s to modernize its economy. His boom was favored by the Vietnam War, while Taiwanese manufacturers provided the US army.
The latter provides 13% of world production, according to the data of 2022, and are the first suppliers of North America. Problem, these manufacturers are today in a critical economic situation.
In a year, their orders fell by 20%. Taiwanese companies are taken in a vice. On the one hand, they suffer a lot from the consequences of the turning point in American politics. Since June, its production has been reached by 50% customs duties decreed by Donald Trump for steel and aluminum. In addition, the local currency appreciated 10% compared to the US dollar since the beginning of the year.
On the other hand, Taiwanese companies face the growing competition of Chinese companies, which offer prices of 30 to 50% lower. Consequence: Balance deposits are linked. A local politician tells the New York Times that a dozen factories in his constituency has closed in recent months.
Interruption in the United States
The consequences are already visible in the American soil. At the end of March, nail prices increased by 4% according to the Wall Street Journal. The increase in costs interrupts supply chains, in sectors as diverse as appliances, car or construction. However, for the moment, these imports in imports cannot be compensated by US production.
Therefore, supplies tensions generate additional costs and volatile prices. Combined at high interest rates, the increase in the price of construction materials, and in particular of fixations, weighs a lot in the American real estate sector. In August, the construction of new homes fell 8.5% in the United States, according to KPMG.
Source: BFM TV
