Impact of Brexit on Machine Tool Industry in Taiwan

Abstract

The decision by Britons to leave the European Union on June 23, 2016 immediately provoked swings in the global financial market. The British Pound took a heavy beating. Stock markets collapsed and capital around the world rushed to safe havens such as the Japanese Yen and US Dollars. The process of Brexit will take at least two years, as the British Parliament is required to trigger Article 50 of the Lisbon Treaty to set off the withdrawn procedures. The impact of Brexit on the machine tool industry in Taiwan and the rest of the world can be examined in the light of short-term capital flight to the Japanese Yen, US dollars and gold and the trading of machine tools between the UK and Taiwan. Whilst Brexit does not have significant effects on the machine tool transactions between the UK and Taiwan in the short term, it is possible that the automobile industry in the UK may seek an exodus and affect the British machine tool industry and exports. Currently, the machine tool industry in Taiwan should seek new businesses to counter the slowdown of the global demand in the new mediocre economy.