SA’s ties with China: Taiwan flip flops on trade restrictions
Taiwan has suspended restrictions on semiconductor exports to South Africa, just two days after announcing them.
Taiwan’s change of heart signals an unease over using its chip dominance as a diplomatic tool, writes Bloomberg.
The island nation currently dominates the global chip market through Taiwan Semiconductor Manufacturing Co. (TSMC).
TSMC produces the majority of the world’s most advanced semiconductors that are essential for AI, smartphones, and industrial technology.
Trade restrictions
On Thursday, Taiwan’s Ministry of Economic Affairs said it had decided, after discussions with the Foreign Ministry, to halt the planned controls.
The restrictions, which were announced on Tuesday, would have required pre-approval for most chip shipments to South Africa and were set to take effect in late November.
The initial move was unprecedented: Taiwan had never before unilaterally imposed chip export limits on another country.
Officials framed it as a response to South Africa’s attempts to downgrade Taipei’s presence by relocating its de facto embassy from Pretoria to Johannesburg – a push that began after South Africa hosted a 2023 BRICS summit attended by Chinese President Xi Jinping.
South Africa’s ties with China
Pretoria first cut official diplomatic ties with Taiwan in 1997, aligning itself with China.
Analysts viewed the trade restrictions as part of Taiwan’s broader strategy to leverage its central role in the global semiconductor supply chain, dominated by TSMC.
The controls also came amid growing frustration in Taipei over Beijing’s efforts to limit the island’s influence.
For years, China has claimed Taiwan as part of its territory, seeking to isolate it diplomatically. Taiwan, meanwhile, governs itself as a self-ruled democracy and has resisted Beijing’s pressure.
So what now?
The abrupt suspension suggests officials reconsidered the risks – particularly the potential blowback on global supply chains and Taiwan’s own tech firms.
China, which would be highly exposed to any Taiwanese chip curbs, accused Taipei on Wednesday of “deliberately destabilising” supply chains.
The reversal underscores the delicate balance Taiwan faces: defending its sovereignty while avoiding moves that could undercut its reputation as a reliable supplier of the world’s most advanced chips.
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