Tue, Aug 05, 2025 page9

• Levies might not leave Taiwan at disadvantage

  STILL WHOLE: Taiwan’s export competitiveness remains intact, and unlike Japan and South Korea, Taiwan’s export profile is more complementary to the US, Nomura said

  • By Crystal Hsu / Staff reporter
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  Taiwan is not necessarily at a disadvantage under the US’ 20 percent tariff announced last week, given structural differences in its export economy compared with Japan and South Korea, Nomura Asset Management Taiwan Ltd (野村投信) said in a report on Friday.

  Nomura’s Taiwan equity team holds a neutral view on the newly announced tariff rate, even as markets expressed disappointment that Taiwan’s rate trails the 15 percent levied on exports from South Korea and Japan.

  The Nomura report said that Taiwan’s export competitiveness remains intact, as much of its production is already offshore, particularly in China and Southeast Asia.

  

  People observe the loading of shipping containers at the Port of Keelung on April 22.

  Photo: Ritchie B. Tongo, EPA-EFE

  Unlike Japan and South Korea, whose automotive exports are heavily dependent on the US market, Taiwan’s export profile is more complementary to US demand, it said.

  Moreover, the lower tariffs granted to Japan and South Korea reflect their reliance on US-bound auto exports and the substantial concessions in terms of pledged investments and purchases made during trade talks, it said.

  The 20 percent levy for Taiwan is broadly consistent with the rates imposed by Washington on other countries in the region, it said.

  For example, China faces duties ranging from 37.5 to 55 percent, although the rate drops to 20 percent for consumer electronics, the report said.

  In Southeast Asia, where many Taiwanese firms have manufacturing bases, tariffs are 20 percent in Vietnam, and 19 percent in Thailand, Malaysia and Indonesia, roughly matching Taiwan’s, it said.

  Nomura said that Taiwan’s outcome is “reasonable” and sees no urgent need to further shift production abroad in pursuit of lower tariffs.

  While the new US tariffs could temporarily raise costs for US buyers of Taiwan-made artificial intelligence (AI) server components, the total cost would still undercut US domestic manufacturing, the report said.

  As US President Donald Trump’s trade policies reshape global supply chains, Taiwan’s strategic relationship with US chipmaker Nvidia Corp is likely to deepen in AI, reinforcing long-term tailwinds for Taiwanese equities, it said.

  Some Taiwanese suppliers are already ramping up investments in the US and Mexico to reduce tariff exposure — a trend Nomura expects to continue.

  In the longer term, robust global demand for AI servers and high-performance computing would help preserve Taiwan’s central role in the tech supply chain, with reciprocal tariffs having limited fundamental impact, Nomura said.

  Any near-term market pullbacks triggered by sentiment shifts might present buying opportunities, particularly in AI-related names with low consumer cycle exposure, it said.

  The firm advises caution in consumer electronics, where front-loaded shipments earlier this year might result in elevated inventories.

  Investment focus would remain on AI supply chain beneficiaries with strong end-market demand and minimal tariff sensitivity, it said.

  Despite the resolution of one major source of uncertainty, the TAIEX has traded within a narrow range, while AI-related stocks are expected to continue outperforming due to strong growth positioning, the report said.
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