Thu, May 16, 2019 - Page 4 News List

New round of tariffs to hit Taiwanese makers of technology devices: ITRI

Staff writer, with CNA

Taiwanese companies that manufacture telecommunications devices and computers in China are likely to be hit hard by the country’s escalating trade dispute with the US, as the products are being targeted in the US’ new list of proposed tariffs, an Industrial Technology Research Institute (ITRI) official said on Tuesday.

The official made the remarks in a telephone interview with Central News Agency after the US on Monday released a list of about US$300 billion of Chinese products, including information and communications technology products, such as smartphones and laptops, which it is threatening to hit with tariffs of up to 25 percent.

MORE SEVERE

Roy Chun Lee (李淳), deputy director of the Taiwan World Trade Organization and Regional Trade Agreements Center of the Chung Hua Institution for Economic Research, said that the new tariffs’ effects would be more severe than those the US announced last year.

This time, China-based Taiwanese manufacturers, such as Hon Hai Precision Industry, which assembles Apple iPhones, and Quanta Computer, would be the first to suffer, Lee said.

The list is spread over 3,805 categories, Lee said, adding that the US and China are Taiwan’s largest export markets.

ADVERSE EFFECTS

The dispute would lead to an economic slowdown, as well as a decline in investment and consumption in China, which would result in lower demand for Taiwan-made components and semi-finished products, he said.

However, as US consumer electronics brands would also be in the line of fire, they would try to pressure US President Donald Trump to end the dispute soon, Lee said.

Gordon Sun (孫明德), director of the Taiwan Institute of Economic Research’s Economic Forecasting Center, said that Taiwanese manufacturers in China would be directly hit if the new tariffs are implemented, or if the trade talks between the US and China break down.

China-based Taiwanese makers of information and communications technology products should quickly expand their manufacturing capacity in Taiwan and elsewhere, and relocate their product lines for US-bound exports, he said.

While Taiwanese firms based in China have been moving their production lines back home or to Southeast Asia, it would take 10 years at the current pace to fully relocate their manufacturing lines for exports to the US, ITRI said.

TEXTILES SAFE

Taiwanese apparel and textile makers are unlikely to be affected by the new tariffs, even though the products are on the list, because they had already moved their production lines from China to Southeast Asia long before the dispute started, ITRI said.

The US last year imposed tariffs of 10 to 25 percent on US$200 billion of Chinese goods after the two countries failed to reach a trade deal.

Following the US’ latest threat, China on Monday said it would raise tariffs on US$60 billion of US goods on June 1.

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