TAIPEI (Taiwan News) — Central Bank Governor Yang Chin-long (楊金龍) on Saturday (July 29) warned that a large trade surplus with the United States could trigger sanctions against Taiwan.

Due to the readjustment of supply chains, Taiwan’s exports to the U.S. had increased as Chinese exports fell, in a process which Yang said could attract calls for sanctions. On the other hand, the changes could also help Taiwan’s financial institutions provide services to Taiwanese businesses overseas, he said.

The nation’s top banker was speaking at a forum about the global economy and financial trends hosted by National Cheng Chi University in Taipei City, CNA reported. His keynote speech focused on how Taiwan should address the latest developments in globalization.

Due to disputes between the U.S. and China, Taiwanese businesses had already responded by moving supply chains to Southeast Asia, he said. He added the change had helped the country reduce its past reliance on investments in China.

Yang underlined the differences between Taiwan and financial centers like Singapore and Hong Kong. Taiwan had always focused on domestic and overseas manufacturing, with financial institutions now following those industrial businesses overseas to provide financial services, he said.

As a small open economy trading with the world, Taiwan had profited from globalization to raise the living standards of its population, according to Yang. However, he added the country needed to closely monitor the possibility that trade surpluses brought about calls for sanctions. Taiwan needed to avoid becoming a potential target for financial or trade sanctions from the U.S., Yang concluded.