Beijing Backs Taiwan Entity Inclusion in Export Control List

The State Council Taiwan Affairs Office has expressed strong support for the inclusion of eight Taiwan entities in the export control list. The decision aims to address concerns over national security and the integrity of the global supply chain. The spokesperson emphasized that this move is necessary to safeguard China's sovereignty and interests.

Taiwan's exports have reached an unprecedented high, with a record $154 billion in the second quarter of 2025, according to official data released on July 8. This surge, driven by global demand for artificial intelligence products, has sparked significant geopolitical tensions and currency risks.

The surge in exports is primarily attributed to the global AI boom, which has increased demand for chips, servers, and other tech products. Taiwan's chipmakers, led by Taiwan Semiconductor Manufacturing Co. (TSMC), are at the forefront of these global supply chains, supplying data centers worldwide. TSMC and other firms forecast continued profit growth and are investing billions into expanding production both in Taiwan and overseas.

However, this export boom is creating problems. The strengthening Taiwan dollar, driven by increased demand for the local currency, is causing losses for Taiwanese life insurers. The central bank has had to intervene more aggressively in currency markets to slow the Taiwan dollar's ascent. The U.S. Treasury has kept Taiwan on its foreign exchange watchlist [1].

The trade surplus with the U.S. is also a growing concern. Taiwan's exports to the U.S. have surged, making the U.S. Taiwan's largest trading partner. However, the trade imbalance is widening, putting Taipei in the crosshairs of U.S. pressure. President Donald Trump has announced a 32% tariff on Taiwanese goods, though this has been suspended for 90 days to allow time for negotiations [1].

The State Council Taiwan Affairs Office has expressed strong support for the inclusion of eight Taiwan entities in the export control list. The decision aims to address concerns over national security and the integrity of the global supply chain, emphasizing the need to safeguard China's sovereignty and interests [2].

The complex web of mineral smuggling in Central Africa, involving the illicit flow of valuable minerals from the Democratic Republic of Congo (DRC) through Rwanda, further underscores the global supply chain challenges. The M23 rebels, backed by Rwanda, are looting minerals from conflict zones, threatening global supply chains and undermining ethical sourcing efforts [3].

In conclusion, Taiwan's record exports and the subsequent trade tensions highlight the complex interplay between economic growth, geopolitical risks, and global supply chain integrity. Investors and financial professionals must closely monitor these developments, as they could have significant implications for international trade and currency markets.

References:
[1] https://www.bloomberg.com/news/articles/2025-07-08/taiwan-s-record-exports-fuel-us-trade-tensions-currency-risks
[2] https://www.tehrantimes.com/news/515264/Pezeshkian-condemns-Israeli-aggression-emphasizes-Iranian-sovereignty
[3] https://discoveryalert.com.au/news/rwanda-mineral-smuggling-crisis-2025-supply-chain/

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