The Taiwanese government needs to review its existing import duties on U.S. goods and practices to seek to remove the trade barriers that led to the high reciprocal tariff US President Donald Trump slapped on the country, economists said yesterday.
In particular, the government needs to study a report recently published by the United States Trade Representative, which highlighted issues involving cars, as well as U.S. beef and pork products, Dachrahn Wu (吳大 任), a professor at National Central University’s Department of Economics, told CNA.
According to Wu, the reciprocal tariff of 32 percent Trump announced for Taiwan on Wednesday reflected Washington’s view that Taipei has high trade barriers.
Photo: Ann Wang, Reuters
Taiwan still faces higher tariffs than Trump announced for Japan (24 percent) and South Korea (26 percent), despite the US$100 billion new investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) announced on March 3 to expand its American operations, Wu said.
Taiwan’s economy is expected to be impacted as Taiwanese exporters have become more reliant on the US market, Wu said.
In February, the US for the first time in 24 years, became the top export destination of goods from Taiwan, accounting for 28.5 percent of total outbound sales, followed by China and Hong Kong (28.4 percent), Ministry of Finance data showed.
If exports to the US account for a quarter of total exports this year, and exports contribute 60 percent of Taiwan’s GDP, Trump’s tariff will impact 15-20 percent of Taiwan’s GDP this year, Wu said.
The Ministry of Economic Affairs needs to pool resources and see whether steel or petrochemical industries or businesses in the semiconductor supply chain can expand investments in the US to meet Trump’s goal of boosting American manufacturing, he said.
TSMC has said the chipmaker’s investment in Taiwan will not be affected by its expansion in the US, so Wu said the government needs to think about industrial strategies once the semiconductor supply chain is transferred to the US.
The hit on domestic investment could also impact Taiwan’s GDP, making growth of 3 percent more difficult, Wu said.
Meanwhile, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said the Ministry of Finance should consider lowering the 17.5 percent import tax on automobile and 30 percent tariff on health food as bargaining chips in talks with the US.
Lin said it is difficult to reduce the large trade deficit the US has with Taiwan in a short period of time, but buying more US natural gas and oil, increasing US production and having a stronger New Taiwan dollar should help.
The trade deficit the US ran with Taiwan rose 54.6 percent to US$73.92 billion last year, according to data released by the International Trade Administration under the Ministry of Economic Affairs.
Taiwanese businesses that moved production to Vietnam and Thailand will also need to consider how to reposition themselves and the supply chain as the two countries are subject to reciprocal tariffs of 46 percent and 37 percent, respectively, Lin said.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
‘FAILED EXPORT CONTROLS’: Jensen Huang said that Washington should maximize the speed of AI diffusion, because not doing so would give competitors an advantage Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) yesterday criticized the US government’s restrictions on exports of artificial intelligence (AI) chips to China, saying that the policy was a failure and would only spur China to accelerate AI development. The export controls gave China the spirit, motivation and government support to accelerate AI development, Huang told reporters at the Computex trade show in Taipei. The competition in China is already intense, given its strong software capabilities, extensive technology ecosystems and work efficiency, he said. “All in all, the export controls were a failure. The facts would suggest it,” he said. “The US
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
French President Emmanuel Macron has expressed gratitude to Hon Hai Precision Industry Co (鴻海精密) for its plan to invest approximately 250 million euros (US$278 million) in a joint venture in France focused on the semiconductor and space industries. On his official X account on Tuesday, Macron thanked Hon Hai, also known globally as Foxconn Technology Group (富士康科技集團), for its investment projects announced at Choose France, a flagship economic summit held on Monday to attract foreign investment. In the post, Macron included a GIF displaying the national flag of the Republic of China (Taiwan), as he did for other foreign investors, including China-based