Business leaders in Taiwan yesterday voiced deep concern that US tariff challenges would sap GDP growth this year by half and that a planned subsidy for small and medium-sized enterprises would be inadequate to help them weather the storm.
Lin Por-fong (林伯豐), chairman of the Third Wednesday Club (三 三會), urged the government to take swift and decisive action to support domestic businesses facing unprecedented pressure from escalating US tariffs and global economic uncertainty.
Taiwan’s GDP growth might have difficulty reaching 1.5 percent this year, falling far short of the government’s 3 percent projection, Lin told a monthly gathering in Taipei.
Photo: CNA
“The US government’s unpredictable tariff decisions, including the imposition of a 32 percent tariff on Taiwanese goods, are placing a heavy and unreasonable burden on local firms,” he said, calling for a coordinated rescue plan for affected sectors.
He urged the government to offer income tax incentives, reduce commodity taxes, remove stamp duties and lower import tariffs, particularly on raw materials and vehicles.
The government could provide financial tools such as increased loan access and interest rate cuts to ease corporate burdens, Lin said.
Lin called on the government to support trade with China, which is Taiwan’s largest trading partner representing 31 percent of outbound shipments last year, compared with the US, which accounted for 23 percent of Taiwan's overall exports.
The government should also consider pushing back carbon taxes until 2027 to align with the EU’s Carbon Border Adjustment Mechanism, he added.
Meanwhile, firms should invest in innovation and seek to raise added value through research and development, he said.
Kinpo Group (金仁寶集團) founder Rock Hsu (許勝雄) said that while larger corporations have the capacity to adapt, small and medium-sized enterprises (SMEs) face existential threats.
The government should expand its NT$88 billion (US$2.71 billion) relief package — two or threefold — and application details be disclosed without delay, Hsu said.
“The tariff challenge is not simply a trade issue,” he said. “It is a geopolitical struggle between the US and China, which might not subside ahead of the US midterm elections next year.”
The government must act quickly to shore up businesses, especially SMEs, so that they can weather the storm, he said.
If the US implements the 32 percent "reciprocal" tariffs on Taiwanese goods, Taiwan's manufacturing sector is likely to see a 5 percent drop in production value, National Development Council Deputy Minister Kao Shien-quey (高仙桂) said in a speech at the gathering yesterday.
The 32 percent import duty on Taiwan could reduce industrial exports to the US by 26 percent and lead Taiwanese manufacturers to relocate their factories to Mexico and other countries, impacting Taiwan's production capacity and hurting domestic employment, Kao said
Given the US imposed sweeping 25 percent tariffs on all steel and aluminum as well as cars and car parts imported into the country, if Taiwan's hand tool and plumbing hardware products are subject to the 32 percent tariff, this could hurt Taiwan's SMEs in the industries, she said.
Additional reporting by CNA
This story has been modified since it was first published to add the remarks of National Development Council Deputy Minister Kao Shien-quey at the event.
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