Taiwan should seek a tariff exemption for its information and communications technology (ICT) products during negotiations with the US, as they constitute about 70 percent of the nation’s exports to the US, the Chung-Hua Institution for Economic Research (CIER) said yesterday.
The impact of tariffs on Taiwan’s ICT industry could be enormous, as it would not be easy for Taiwanese suppliers to relocate production to the US anytime soon, CIER president Lien Hsien-ming (連賢明) told a forum in Taipei about US President Donald Trump’s tariff policies.
Taiwan faces a 32 percent “reciprocal” tariff that Trump imposed on April 2 before announcing a 90-day pause on April 9.
Photo: Hsu Tzu-ling, Taipei Times
Taipei and Washington held their first meeting on April 11, with the Office of Trade Negotiations saying that tariffs, trade barriers and export controls were discussed.
President William Lai (賴清德) described the process of the first round of talks as “smooth,” while the Executive Yuan said it expected another round of negotiations to begin soon.
Lien said it would not be wise for Taiwan to take tough action in retaliation for Trump’s tariffs, given that Taiwan’s economy is much smaller than that of the US.
He said he expected Trump to set a “reciprocal” tariff of 15 to 20 percent on goods made in Taiwan.
Yang Shu-fei (楊書菲), deputy head of CIER’s Regional Development Study Center, told the forum that Taiwan could help the US rebuild its manufacturing sector by sharing its experience in developing science parks and industrial zones.
Yang said such parks and zones could create jobs and upgrade manufacturing in the US, while Washington could use its roughly 300 free-trade zones to trade goods made by Taiwanese manufacturers and help reduce its trade deficit.
The US-Taiwan trade deficit rose from US$47.8 billion to US$73.9 billion last year, driven by a surge in US imports, CIER said.
Due to the potential US tariffs, Taiwan’s economic growth could slow to 1.66 percent this year, the institute predicted.
The Directorate-General of Budget, Accounting and Statistics in late February forecast a 3.14 percent growth for this year, after the economy grew 4.59 percent last year.
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