Taiwan could see a decline in exports and GDP growth due to the US’ implementation of a 32 percent “reciprocal” tariff on Taiwanese goods from yesterday, economists said yesterday.
Taiwan’s exports to the US are likely to dampen in the coming 12 months, with a direct impact on GDP ranging from 1.2 to 2.5 percentage points, depending on the elasticity of US import demand, Standard Chartered Bank senior economist Kelvin Lau (劉建恆) said.
Taiwan’s tech sector — especially firms supplying advanced chips and information communications technology products — is expected to be less affected by the tariffs due to their global technology leadership positions.
Photo: CNA
The actual economic blow could be milder, as other competing markets are also subject to tariff barriers, he said.
“While the short-term pain is real, Taiwan’s relative competitiveness won’t be substantively eroded,” Lau said.
Taiwan’s central bank is expected to hold interest rates steady this year with the consumer price index expected to hover at about 2.1 percent, he said.
Standard Chartered stood by its forecast of 3 percent for Taiwan’s GDP growth this year, but it has seen intensifying downside risks, he added.
Allen Liu (劉家豪), head of wealth management strategy at Standard Chartered, urged Taiwanese manufacturers to assess the substitutability of their products in the global market.
“If there are no viable alternatives elsewhere, they may have stronger bargaining power with US companies and pass tariff costs onto US importers,” Liu said.
Further, the US does not have a supply chain of electronics and it would not be easy to move production lines to the US quickly, he said.
How Washington implements its tariff policy would shape related firms’ global deployment, he added.
Although the US claims economic strength, it is also under pressure to speed up trade negotiations, and US-Taiwan trade talks merit close attention, Liu said.
Moody’s shared similar observations, saying that Trump’s sweeping new tariffs represent the largest increase since the 1930s and the implications are unfolding across the world.
The new tariffs on Asian markets turned out more draconian than expected, which is unfavorable for the region, the ratings agency said.
The region is exposed to higher US tariffs directly and indirectly, it said, adding that direct exposure is the heaviest for economies such as Taiwan, China and Vietnam.
“This major shift in US trade policy is credit negative for the region, but we expect the vast majority of countries to negotiate rather than to retaliate through strategies such as establishing bilateral trade agreements or buying more US goods,” Moody’s said.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
POWER BUILDUP: Powered by Nvidia’s B200 Blackwell chips, the data center would support MediaTek’s computing power demand and business growth, the company said Smartphone chip designer MediaTek Inc (聯發科) yesterday launched a new artificial intelligence (AI) data center with a maximum capacity of 45 megawatts to meet its rising demand for computing power required to develop new advanced chips for AI applications. The company has completed the first-phase computing power buildup at the data center in Miaoli County’s Tongluo Township (銅鑼), providing 15 megawatts of capacity to support its research and development (R&D) capabilities, despite an industrywide shortage of key components, MediaTek said. Supply constraints have plagued a wide range of key components, including memory chips, solid-state drives, power supply units and central
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
RSS