Taiwan’s economy might expand 3.22 percent this year, moderating from a 4.3 percent pickup last year, as exports and domestic demand remain healthy despite rising uncertainty linked to global trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
“Taiwanese firms would continue to benefit from the active building of artificial intelligence capability by global technology titans, but [US president-elect] Donald Trump is casting a shadow over the economic landscape with his planned tariff hikes on all imports,” CIER president Lien Hsien-ming (連賢明) said at an economic outlook forum in Taipei.
It is unclear whether Taiwan’s information and communications technology products would be exempted from extra tariffs, as they are currently tariff-free, Lien said.
Photo: RITCHIE B. TONGO, EPA-EFE
Exports, the main growth driver, might rise 5.56 percent this year, while imports would rise 5.36 percent, slowing from 9.08 percent and 11.67 percent respectively last year, the Taipei-based think tank said.
Tech product shipments bound for China and other destinations deemed as unfriendly by the US might take a hit from Washington’s latest export bans, Lien said, adding that more time is needed to evaluate the impact as the US is going through a power transition.
Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said Trump is waging a “technology war” under the guise of a tariff war to create a gap between US and Chinese technology.
Directorate-General of Budget, Accounting and Statistics deputy head Tsai Hung-kun (蔡鴻坤) said that tariff hikes appear inevitable, but local firms’ reshoring in recent years has helped mitigate the shock and bolster private investment.
Private investment is projected to gain 4.71 percent this year on top of a 4.74 percent increase last year, the CIER said.
The consumer price index might slow to 1.93 percent this year, returning to the central bank’s 2 percent target after rising 2.18 percent last year, the institute said.
The central bank is likely to keep interest rates unchanged given Taiwan’s decelerating, but decent GDP growth, Taishin Securities Investment Trust Co (台新證券投信) chairman Cheng Cheng-mount (鄭貞茂) said.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
A move by US President Donald Trump to slap a 25 percent tariff on all steel imports is expected to place Taiwan-made steel, which already has a 25 percent tariff, on an equal footing, the Taiwan Steel & Iron Industries Association said yesterday. Speaking with CNA, association chairman Hwang Chien-chih (黃建智) said such an equal footing is expected to boost Taiwan’s competitive edge against other countries in the US market, describing the tariffs as "positive" for Taiwanese steel exporters. On Monday, Trump signed two executive orders imposing the new metal tariffs on imported steel and aluminum with no exceptions and exemptions, effective