FINANCE
EU ministers push for tax
Europe’s finance ministers yesterday made another effort to achieve a breakthrough on a disputed financial transactions tax, as Germany unveiled a plan to bring on board a skeptical Britain. Ministers entering the second of a two-day meeting here expressed cautious support for a proposal issued by German Finance Minister Wolfgang Schaeuble to introduce a tax only on trade in company shares before broadening it out. Acknowledging that resistance from several countries had delayed the tax, proposed by the European Commission in September last year, that aims to make the financial sector pay for the crisis, Schaeuble proposed an “intermediate step.”
REGULATIONS
US has highest corporate tax
The US will hold the dubious distinction starting today of having the developed world’s highest corporate tax rate after Japan’s drops to 38.01 percent, setting the stage for much political posturing, but probably little tax reform. Japan and the US have been tied for the top combined, statutory corporate tax rate, with levies of 39.5 percent and 39.2 percent respectively. These rates include central government, regional and local taxes. Japan’s reduction, prompted by years of pressure from Japanese politicians hoping to spur economic growth, will give that country the world’s second-highest rate. This has triggered complaints from US politicians and business groups. The average corporate tax rate this year for the 34 developed countries is 25.4 percent, according to the Organisation for Economic Co-operation and Development.
RESOURCES
Sino-Forest bankrupt
Chinese timberland company Sino-Forest Corp (嘉漢林業), which is being investigated for fraud, said on Friday it is filing for bankruptcy protection, putting itself up for sale and filing a lawsuit against the research firm that accused the company of exaggerating its timber holdings. Sino-Forest said it will implement a restructuring plan if the company doesn’t receive a suitable takeover offer. The request to the Ontario Superior Court is the equivalent of a US Chapter 11 filing. Sino-Forest was once Canada’s most valuable publicly traded forestry business, but shares plunged last year after short-seller Muddy Waters Research alleged that the company exaggerated its assets. Securities regulators in Canada suspended trading in the shares on the Toronto Stock Exchange. The company is under investigation by Canada’s national police force. Sino-Forest’s shareholders in Canada and the US have also sued, alleging fraud at the company.
UNITED STATES
Consumer confidence up
Consumer spending increased by the most in seven months in February as households shook off a rise in gasoline prices, leading economists to raise forecasts for first-quarter growth. Even with gasoline around US$1.05 per liter, Americans were more optimistic about the economy’s prospects this month than at any other time over the past year, drawing solace from a firming labor market. The Commerce Department said on Friday that consumer spending rose 0.8 percent in February as demand for long-lasting goods, like automobiles, rose sharply. It also said spending in January was double the previously reported 0.2 percent gain. Separately, the Thomson Reuters/University of Michigan’s final reading for the overall consumer sentiment index last month rose to 76.2, the highest level since February last year, from 75.3 in February.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
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