Taiwan Dollar Surges Amid AI, Trade Policy Concerns

Mounting tensions between the U.S. and China have intensified global economic uncertainty, with escalating tariffs and trade disputes impacting both markets and consumer goods. The U.S. remains deeply reliant on Chinese manufacturing for household products and industrial components, making any potential economic decoupling disruptive for American consumers and businesses. While a full break in U.S.-China trade ties is unlikely, the ongoing standoff has already led to market volatility and threatens further job losses in U.S. manufacturing. Meanwhile, China has responded to tariffs by diversifying away from U.S. exports and focusing on domestic innovation, particularly in AI, but continues to suppress key economic data, making it harder for analysts to assess real conditions. The current phase is reminiscent of previous upheavals in global economic systems, such as the collapse of Bretton Woods, reflecting recurring tensions in the dollar-dominated world order. Despite these challenges, both nations face significant risks if the situation escalates further, as the intertwined nature of their economies makes disentanglement complex and costly.