TAIPEI, Reuters – Taiwan’s trade surplus is due to China-U.S. Trade War and Pandemic Driving Tech Demand, a Central Bank official stated on Friday. This was after U.S. Treasury declared that Taiwan had exceeded its currency manipulation thresholds.

In its semi-annual currency update, the Treasury stated that no significant trading partner of the United States sought to manipulate currencies in order to gain a trade advantage, or prevent effective balance payments adjustments for the period June 2021 through June 2021.

It said, however, that Taiwan and Vietnam exceeded their current account, trade surplus and foreign exchange intervention thresholds. The government will work together to resolve U.S. concerns.

Unnamed officials from Taiwan’s central banks said that they would communicate regularly with the United States, and that communication was always possible between them.

As the China-U.S.-trade war and the COVID-19 pandemic saw increased demand for communication devices made in Taiwan, Taiwan’s trade surplus exceeded $20Billion last year. The official said that Taiwan’s exports were more due to exchange rate factors than the trade surplus.

The official stated that “This is what we talk about when we speak with the U.S.” and reiterated previous statements made by Taiwanese officials regarding the trade imbalance.

Tech companies have seen some of their manufacturing shift away from China in the trade war. The pandemic’s work-and-study trend has boosted the demand for smart phones, tablets, and laptops.

Taiwan is the global center for semiconductor production. It supplies key components to Apple Inc. (NASDAQ:) as well as other tech giants.

Its 5.6% gains against the greenback in Taiwan last year were among Asia’s strongest. This is the highest-performing Asian currency and it has risen more than 2.5% against US dollars.

In December 1992, the United States officially labeled Taiwan a currency manipulator. In 2020, it was placed back on the monitor list.