Taiwan's February trade agreement with the United States — struck under pressure from President Donald Trump's tariff policies — may involve significantly more capital flowing to America than the government has publicly acknowledged, according to experts who attended a closed-door forum in Taipei.
Under the Agreement on Reciprocal Trade (ART), Washington lowered tariffs on Taiwanese goods to 15％. In return, Taipei pledged roughly $250 billion in direct corporate investment plus government credit guarantees that would enable banks to extend up to another $250 billion in corporate loans.
The Multiplier Question
At a 19 March seminar hosted by National Chengchi University's Taiwan Security Research Center, participants debated the deal's true scale. TechForce Think Tank executive director Rocky Uriankhai (烏凌翔) argued that standard banking multipliers could push the final investment figure far higher. Citing consultations with former US-bank executives, he estimated that the $250 billion in credit guarantees could generate up to five times that amount in actual lending — potentially $1.25 trillion — once downstream semiconductor suppliers and other firms draw on the facilities.
Uriankhai warned that even a modest 4％ default rate on guaranteed loans could leave Taiwanese banks facing up to $10 billion in unrecoverable losses.
The Negotiator's Counterargument
Former chief trade negotiator Deng Chen-chung (鄧振中), who attended as a panelist, offered a more cautious assessment. Drawing on Taiwan's decades-old SME Credit Guarantee Fund experience, Deng said realistic guarantee coverage typically runs at 70–80 per cent of any loan, with companies providing the rest of the equity. He suggested the overall Taiwanese commitment under the deal would likely fall between $400 billion and $500 billion, not the much larger sums implied by full multiplier effects.
A Banker's Perspective
A veteran banker with more than 20 years at foreign institutions, Liang Ching-ssu (梁敬思), told the forum that top-tier Taiwanese firms such as TSMC already enjoy strong negotiating power with international lenders and would probably not need government guarantees. He believes the credit line is primarily intended to help smaller suppliers in the semiconductor supply chain set up US operations in technology-park clusters. Even so, Liang agreed the guarantees would still create a multiplied investment effect, though he declined to specify an exact figure.
State Banks Left Holding the Risk
One forum participant later told Storm Media that private Taiwanese banks are unlikely to join the programme, meaning the burden would fall mainly on state-owned lenders — raising questions about their readiness and capital adequacy.
A Delicate Balancing Act
The discussion highlights the delicate balance Taipei is trying to strike: satisfying US demands while shielding Taiwan's economy from excessive capital outflow at a time of heightened cross-strait and global economic uncertainty.
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