Taiwan Upset at U.S. Move to Boost Currency

Officials and the business community here have criticized U.S. pressure to raise the value of Taiwan’s currency, saying a stronger Taiwanese dollar would do little to redress the trade imbalance between the two countries.

A senior economic official, who declined to be identified, angrily called the American government’s pressure “distasteful.” A currency rise would not do any good in resolving the huge U.S. trade deficit, he told reporters last week.

The U.S. trade imbalance with Taiwan widened to $7.91 billion in the first half of 1987 from $6.16 billion in the same period last year, according to official Taiwan government figures.

The Reagan Administration has asked Taipei to strengthen its currency by about $1 (Taiwan) against U.S. currency to help it fight protectionist bills in Congress and reduce the deficit. The present exchange rate is about 31 Taiwanese dollars to one U.S. dollar.

The Administration hinted that it might retaliate if Taiwan did not meet its demand.

“It will only give the impression that the U.S. is bullying a small country like us,” the Taiwanese official said in response to the possibility of U.S. retaliation.

Business representatives from Taiwan’s textile, footwear, toy, machinery, hardware and sporting goods industries asked their government to resist the U.S. demand.

In a similar move, the Development Bank of Singapore Ltd. has rejected what it called “clamoring by the U.S. legislators” to revalue the Singapore dollar, saying it will ultimately hurt the United States.

“American efforts to get the Singapore dollar revalued so that U.S. goods could be more competitive (in Singapore) can boomerang on the U.S.,” the bank said in a research paper released Friday in Singapore.