Business confidence last month declined as companies fretted about US threats of “reciprocal” tariffs, but breathed a sigh of relief after Washington and Beijing agreed to step back from an all-out trade war, a survey by the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) found yesterday.
Business sentiment among local manufacturers came in at 90.9, a drop of 3.53 points from March to a two-year low and down for three months straight, as firms sought unsuccessfully to make sense of US President Donald Trump’s trade policy.
Trump on April 2 announced heavy “reciprocal” tariffs on US trade partners, including 32 percent on Taiwanese goods, but declared a 90-day pause a week later.
Photo courtesy of TIER
The backdrop explained why only 18.2 percent of manufacturers reported better performance last month, a plunge of 14.4 percentage points from one month earlier, the institute said.
Meanwhile, companies that posted a decline in business soared 12.7 points to 37.4 percent, it said.
Asked about prospects, 22.9 percent expect their business to improve in next six months, rising from 19.4 percent one month earlier, while manufacturers with a pessimistic outlook dropped 3.7 percentage points to 29.2 percent, the survey showed.
The easing in trade tensions between the US and China late last month prompted global companies to take advantage of the 90-day respite and build inventory, despite lingering uncertainty, TIER Economic Forecasting Center director Gordon Sun (孫明德) said.
The Taiwanese economy might still grow 3 percent this year if Trump demonstrates flexibility and softens tariffs on imports from around the world, TIER president Chang Chien-yi (張建一) said.
Chang expressed hope that the US might set a 15 percent tariff on Taiwan’s goods if bilateral trade talks fare well.
The confidence reading on service providers weakened 3.03 points to 85.41, as financial firms and hospitality operators took a hit from the stock rout and the New Taiwan dollar’s sharp appreciation affected the profitability of exporters and life insurers, Sun said.
While private consumption held resilient and lent support to sales of wealth management products, economic uncertainties at home and abroad warranted a cautious approach in doing business generally, the economist said.
The sentiment gauge for construction firms and real-estate brokers slid 2.98 points to 90.38, falling for four consecutive months, TIER’s Taiwan Industry Economics Database researcher Arisa Liu (劉佩真) said.
Liu said the housing market has slowed for a while and might not turn around anytime soon, in light of the central bank’s continued loan restrictions and the US tariff drama.
Nvidia Corp’s plan to expand its presence in Taipei’s Shilin District (士林) would benefit the neighborhood, but is not strong enough to bolster the whole market, Liu 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
RSS