The Institute of Democracy, Society, and Emerging Technology (DSET) recently hosted an important session on economic security and supply chain resilience, focusing on Taiwan’s position in the evolving global landscape. The panel was led by Dr. Hsien-Ming Lien, Deputy Director of DSET, and featured international experts including Mr. Barath Harithas (Senior Fellow, CSIS), Mr. Mathieu Duchâtel (Senior Fellow, Institut Montaigne), Mr. Akira Igata (Project Lecturer, RCAST, University of Tokyo), and Ms. Klára Hurychová (Senior Researcher, Charles University).
The session addressed how Taiwan, as a global semiconductor leader, must navigate the complex balance between national security and economic competitiveness, especially in the context of shifting trade frameworks.
Key Insights on Economic Security and Global Trade Challenges
The discussion kicked off with a deep dive into the new global trade framework and its implications for economic security. Economic security has become a priority for many nations as they work to protect critical industries like semiconductors from external risks while maintaining global trade partnerships.
Mr. Barath Harithas emphasized that countries like the United States are increasingly concerned about securing sensitive technologies, including semiconductors, through tighter export controls. However, he pointed out that enforcing these controls remains difficult due to the complexities of the global supply chain. “Governments often don’t have enough resources to enforce these regulations,” Harithas explained. Think tanks like CSIS help bridge this gap by providing data and analysis that help governments manage these challenges effectively.
Mr. Akira Igata discussed Japan’s approach to securing critical industries, noting that Japan is diversifying its supply chains to reduce dependence on specific countries. However, he warned that too much focus on economic security could lead to protectionism, isolating Japan from important trade partners. Igata stressed that international cooperation remains crucial for balancing economic security with global competitiveness.
Mr. Mathieu Duchâtel provided insights from Europe, where efforts are underway to secure supply chains, especially in the semiconductor and clean technology sectors. He emphasized that the《European CHIPS Act》 is part of Europe’s broader strategy to reduce dependency on foreign suppliers, particularly from China. However, he acknowledged that the EU faces immense challenges in balancing supply chain self-sufficiency with open trade, especially in a sector as complex as semiconductors.
Ms. Klára Hurychová highlighted the growing regulatory burden faced by companies aiming to operate in Europe. She emphasized the importance of meeting the EU’s stringent standards on sustainability and human rights, warning that failure to comply could result in legal liabilities. This is particularly relevant for Taiwanese companies, which must ensure full compliance across their supply chains.
Balancing Economic Security and Competitiveness
In the second round of discussions, the experts provided further insights into how their respective countries are adapting to the concept of economic security while maintaining global trade connections.
Mr. Harithas discussed how think tanks such as CSIS play a key role in assisting governments in managing export controls, particularly in high-tech sectors. He reiterated that while efforts to enforce these controls are increasing, the global supply chain’s complexity makes it challenging to ensure complete compliance. This issue is particularly relevant for Taiwan, given its dominant role in the semiconductor industry.
Mr. Igata elaborated on Japan’s efforts to diversify its supply chains while reducing reliance on specific countries. He pointed out that international cooperation and open markets are crucial for Japan’s continued economic growth. While Japan must focus on securing its critical industries, it cannot afford to shut itself off from foreign investments and partnerships.
Mr. Duchâtel focused on Europe’s investment in research and development (R&D) as part of its economic security strategy. He emphasized that maintaining a competitive edge in sectors like semiconductors requires more than just export controls—it also requires significant investments in technology and innovation. Duchâtel also acknowledged that coordinating economic security policies across the EU’s member states remains a challenge due to differing priorities.
Ms. Hurychová discussed the legal risks for companies operating within the EU, particularly in light of the region’s increasingly stringent sustainability and human rights regulations. She emphasized that compliance is key, and companies that fail to meet these standards could face substantial penalties. Taiwanese companies looking to expand into the European market must be prepared to navigate these complex regulatory frameworks.
During the Q&A session, the speakers addressed several important questions related to Taiwan’s role in the global economic security framework.
Mr. Harithas responded to a question about how the U.S. enforces export controls on high-tech goods like semiconductors. He reiterated that while the U.S. government is increasing its efforts, the enforcement process remains under-resourced, highlighting the critical role that think tanks play in providing research support.
Mr. Igata was asked about how Japan balances attracting foreign investment with maintaining economic security. He explained that Japan’s success will depend on its ability to strike a balance between government funding for critical industries and private sector confidence.
Mr. Duchâtel spoke on the EU’s challenges in harmonizing economic security policies across its diverse member states, acknowledging that while the EU CHIPS Act is an important step, more needs to be done to ensure full integration of these policies.
Conclusion: Taiwan’s Path Forward
The session provided valuable insights into how Taiwan can navigate the complexities of the new global trade framework. As a leader in the semiconductor industry, Taiwan plays a central role in global supply chains, and its ability to balance economic security with global competitiveness will be critical in the coming years.As the world’s major economies develop stricter economic security frameworks, Taiwan’s strategy will need to involve strengthening its partnerships, investing in research and development, and ensuring compliance with international standards. DSET will continue to be a key player in facilitating these discussions and helping shape Taiwan’s future in the global economic landscape.