Taiwan on US debt ceiling standoff: ‘We’ll watch it very closely’

TAIPEI – Taiwan is watching the high-stakes debate over the United States debt limit “very closely” given the two economies are “very closely connected,” the island country’s foreign minister told reporters Tuesday.

President Biden and Republicans are facing a June 1 deadline to come to an agreement to raise the debt ceiling or risk a default that could have enormous consequences on the global economy — potentially tanking America’s credit rating, triggering a recession and sending the stock markets plummeting. 

“Normally, we don’t expect this kind of situation would happen, and we’ll follow very closely,” Taiwan’s Foreign Minister Jaushieh Joseph Wu said in response to a question from The Hill about the possible risk for Taiwan if the U.S. defaults on its debt, during a press briefing at Taiwan’s Ministry of Foreign Affairs.

Taiwan, as a tiny island country in the Pacific, sees the U.S. as a crucial partner as it seeks to reduce its economic dependence on China, bolster its trade with the U.S. and other partners, and receive billions of dollars in backlogged military purchases. 

“Taiwan’s economy and U.S. economy have been very closely connected, so anything going wrong with the United States or any other major trading partner of Taiwan is going to affect Taiwan, so we’ll watch it very closely,” Wu added. 

Biden is meeting with House Speaker Kevin McCarthy (R-Calif.) and other leaders in Congress Tuesday in a critical discussion with just a few weeks until the debt ceiling deadline. 

The president has maintained a firm stance on raising the debt ceiling without preconditions, while McCarthy is pushing to secure spending cuts as part of any debt limit bill. 

The writer was on a press trip to Taiwan paid for by the Taiwan Ministry of Foreign Affairs.