Taiwan Builds Bigger Bridges in Trade with Southeast Asia

Advanced | September 21, 2025

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Taiwan Strengthens Trade Ties with Southeast Asia

Taiwan is working hard to expand its economic networks in Southeast Asia. Under its New Southbound Policy, the Taiwanese government has been signing trade agreements, boosting investment, and opening offices to make business with Southeast Asian countries easier. The goal is to reduce dependence on any one partner and strengthen ties across the Indo-Pacific. (Wikipedia: New Southbound Policy)

The strategy includes cooperating on tech, agriculture, education, tourism, and trade. Taiwan is also encouraging its companies to invest in countries like Indonesia, Thailand, Vietnam, and others. This helps both sides: Southeast Asia gets investment and infrastructure, and Taiwan gets markets for its goods and services. (Wikipedia)

Rising Trade with ASEAN

Importantly, Taiwan strengthens trade ties with Southeast Asia through increased trade volume with ASEAN (the Association of Southeast Asian Nations) under this policy. Between 2016 and 2021, trade with the 18 New Southbound countries grew significantly. More goods are being exported and more investment is flowing both ways. (USCC Report)

The government is also reducing trade barriers. For example, Taiwanese export regulations and investment rules are being adjusted to make it smoother for companies to set up and move products. This includes easing tariffs, simplifying customs, and promoting bilateral trade agreements. (Nottingham Research Hub)

Challenges and Geopolitics

That said, there are challenges. Taiwan still trades a lot with China and Hong Kong, and some critics say the influence of those markets remains strong. Also, geopolitical tensions, supply chain issues, and rising costs can threaten how balanced or stable these trade ties are. (USCC Report)

Why This Matters

Deepening trade with Southeast Asia helps Taiwan in several ways:

Diversifies risk: Taiwan is less vulnerable if one trading relationship sours.
Economic growth: New export markets and investment destinations can help local businesses and jobs.
Regional influence: Stronger economic ties often translate into more diplomatic leverage.
Cultural exchange: Business deals bring people together (tourism, education, labor), which builds trust.

Overall, Taiwan strengthens trade ties with Southeast Asia to create a more secure and sustainable economic future.

Vocabulary

Diversify (verb) – To make something more varied; reduce risk by having many different sources.
Example: Taiwan is diversifying its trade partners beyond China to reduce economic risk.
Dependence (noun) – Relying on somebody/something else for support or survival.
Example: Heavy dependence on a single market can be dangerous during global disruption.
Export (verb) – To send goods or services from one country to sell in another.
Example: Taiwanese tech firms export semiconductors to several Southeast Asian nations.
Infrastructure (noun) – Basic physical systems (roads, power, etc.) needed for a country or business.
Example: Investments in infrastructure, such as newer ports, help trade move faster.
Tariff (noun) – A tax imposed by a government on goods imported from another country.
Example: Reducing tariffs makes imports cheaper and trade smoother.
Regulation (noun) – Rule or directive made by authorities to control how something is done.
Example: Easing regulation helped Taiwanese firms set up factories more easily.
Geopolitical (adjective) – Related to politics, especially international relations involving geography.
Example: Geopolitical tensions may affect trade routes in the Indo-Pacific.
Bilateral (adjective) – Involving two parties, usually two countries.
Example: Taiwan signs bilateral trade deals to build one‑on‑one cooperation.
Supply chain (noun) – The entire network involved in making and delivering a product.
Example: Disruptions in the supply chain can delay goods and increase prices.
Critic (noun) – A person who expresses disapproval or points out faults.
Example: Some critics argue Taiwan still relies too heavily on China.

Discussion Questions (About This Article)

How does Taiwan’s New Southbound Policy help reduce economic risk?
In what ways might Southeast Asia benefit from stronger trade ties with Taiwan?
What kinds of trade barriers do governments often need to reduce or simplify?
Why are geopolitical tensions relevant when thinking about trade?
What challenges does Taiwan face in balancing its trade relationships?

Topic Discussion Questions

Is it more important for a country to have many trade partners or very deep relationships with a few? Why?
How can smaller countries avoid being overly dependent on larger trade partners?
What role do trade agreements play in global stability?
How might technology and infrastructure investment affect future trade?
Can cultural exchange through business lead to stronger diplomatic ties?

Related Idiom or Phrase

“Don’t put all your eggs in one basket.”
This means you should not rely entirely on one plan or one source, because if it fails, you lose everything. In Taiwan’s case, depending mostly on China is risky, so expanding trade to Southeast Asia is like spreading the eggs across more baskets.
Example: A smart investor doesn’t put all their money into one stock—don’t put all your eggs in one basket.

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This article was inspired by: New Southbound Policy (Wikipedia), USCC Report, and Nottingham Research Hub