Taiwan's export-driven economy accelerated faster than expected in the first quarter of this year, official data showed today, fueled by strong global demand for high-tech products and firms stocking up in case of higher US tariffs.
The nation of 23 million is a powerhouse in the semiconductor industry, with nearly all of the world's most advanced chips made there.
Photo: Ritchie B. Tongo, EPA-EFE
Soaring demand for artificial intelligence (AI)-related chips in recent years has fueled Taiwan's trade surplus with the US — and put it in the cross-hairs of US President Donald Trump and his far-reaching tariffs.
GDP expanded 5.4 percent on-year in the first quarter, the fastest pace in a year, the Directorate-General of Budget, Accounting and Statistics said in a statement, beating a Bloomberg News estimate of 3.6 percent and fourth-quarter growth of 2.9 percent.
"Demand for AI and emerging technology applications remains strong, supply bottlenecks for high-end ICT products are gradually easing and customers are front-loading inventory in response to US tariff measures," the statement said.
Taiwan was hit with a 32 percent levy on its shipments to the US on April 2 when Trump announced hefty tariffs against many US trading partners.
The tolls were suspended for 90 days after trillions of US dollars were wiped off world markets, but a 10 percent blanket tariff remains in place.
Taiwan's negotiating team has held talks with the Trump administration to reduce the levy.
Its trade surplus with the US is the seventh-highest of any country, reaching US$73.9 billion last year.
About 60 percent of its exports to the US are information and communications technology products, including semiconductors.
Taiwan also exports bicycles, auto parts and machine tools.
The Cabinet last week announced a planned special budget of up to NT$410 billion (US$12.8 billion) to shield the economy against the impact of the new US tariff.
Taiwan had sought to avoid Trump's threatened levy by pledging increased investment in the US, more purchases of US energy and greater defense spending.
Chips were excluded from the tariffs, but an ongoing US "national security" probe into the sector could pave the way for a levy.
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