Taiwan says trade not being much affected by Red Sea disruptions

TAIPEI — Taiwanese companies are not being affected much by disruptions to the key shipping lane of the Red Sea as it has coincided with the traditional low season in demand for exporters, Economy Minister Wang Mei-hua said on Monday (Feb 5).

Some shipping companies have suspended transit along the Red Sea route to avoid being attacked by Yemen's Iranian-backed Houthi group, which has launched waves of exploding drones and missiles at vessels since November in response to Israel's military operations in Gaza.

The Houthi attacks have primarily targeted container vessels moving through the Red Sea.

Taiwanese container shipping line Evergreen Marine said in December that ships scheduled to pass through the Red Sea would be rerouted around Africa's Cape of Good Hope.

Speaking to reporters in Taipei, Wang said her ministry had spoken with 14 industry groups as well as companies to gauge the impact of the Red Sea disruptions.

"The winter is the low season for Europe. So our shipping to Europe in the winter is rather less. Before the Spring Festival it's even less," she said, referring to the week-long Lunar New Year holiday which starts this week.

"Of course shipping costs have gone up," she said, but added it was not nearly as bad as in the aftermath of Russia's invasion of Ukraine in 2022.

Taiwan has a trade dependant economy and is a major producer of semiconductors used in everything from cars and microwaves to smartphones and artificial intelligence servers.

The second half of the year is when Taiwanese exporters are traditionally busiest as they ramp up output for the year-end holiday season in Western markets.

Taiwan's economy grew by a preliminary 1.4 per cent in 2023, its slowest pace in 14 years, but is forecast to bounce back strongly this year to expand more than three per cent given strong demand for AI applications, many of which are powered by made-in-Taiwan chips.

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