The 20 percent baseline tariff imposed by the US on goods from Taiwan, combined with an appreciating New Taiwan dollar, could significantly hurt the nation’s machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said yesterday.
TAMI said that starting on Aug. 7, Washington began implementing reciprocal tariffs, setting a provisional 20 percent baseline for Taiwan — higher than the 15 percent applied to Japan and South Korea.
After adding the new 20 percent rate to existing most favored nation (MFN) duties and other trade remedy tariffs, Taiwanese machinery products shipped to the US will face an effective tariff about 10 percent higher than those from Japan and South Korea, the association said.
Photo: EPA-EFE
When factoring in the NT dollar’s sharp appreciation since April, the effective price gap with Japan and South Korea widens to about 20 percent, which TAMI warned could severely undermine the competitiveness of Taiwanese machinery exports.
Previously, the average tariff on Taiwanese machinery exports to the US was about 5 percent, while Japanese and Korean products often enjoyed zero tariffs, the TAMI noted.
The association said the stronger NT dollar has an even greater impact than the tariffs. From 2021 to July 31 this year, the NT dollar depreciated only 4.6 percent, compared with declines of 46.2 percent for the yen and 28 percent for the won.
Taiwan’s traditional price advantage — with equipment priced 20-30 percent lower than Japanese products — has effectively disappeared, especially for machine tool exports, leading to a sharp drop in orders, according to the association.
Given the higher US tariff rate for Taiwan compared with key competitors and the currency’s effect on export competitiveness, TAMI urged the government to take steps to safeguard the industry’s position in global markets.
Separately, the association yesterday reported that Taiwan’s machine tool exports last month reached US$2.79 billion, up 13.4 percent from a year ago, marking six consecutive months of growth.
From January to last month, machinery exports reached US$17.71 billion, an annual increase of 6.5 percent. In NT dollar terms, the total was NT$558.17 billion, up 5.1 percent.
The NT dollar’s appreciation this year has eroded both the real growth of exports and the actual income of companies, the TAMI said. The US and China remain Taiwan’s two largest export markets, with shipments to China rising 3.8 percent year-on-year to US$4.07 billion in the first seven months, and exports to the US increasing 16.1 percent to US$4.72 billion.
SECOND-RATE: Models distilled from US products do not perform the same as the original and undo measures that ensure the systems are neutral, the US’ cable said The US Department of State has ordered a global push to bring attention to what it said are widespread efforts by Chinese companies, including artificial intelligence (AI) start-up DeepSeek (深度求索), to steal intellectual property from US AI labs, according to a diplomatic cable. The cable, dated Friday and sent to diplomatic and consular posts around the world, instructs diplomatic staff to speak to their foreign counterparts about “concerns over adversaries’ extraction and distillation of US AI models.” Distillation is the process of training smaller AI models using output from larger, more expensive ones to lower the costs of training a powerful new
Singapore-based ride-hailing and delivery giant Grab Holdings’ planned acquisition of Foodpanda’s Taiwan operations has yet to enter the formal review stage, as regulators await supplementary documents, the Fair Trade Commission (FTC) said yesterday. Acting FTC Chairman Chen Chih-min (陳志民) told the legislature’s Economics Committee that although Grab submitted its application on March 27, the case has not been officially accepted because required materials remain incomplete. Once the filing is finalized, the FTC would launch a formal probe into the deal, focusing on issues such as cross-shareholding and potential restrictions on market competition, Chen told lawmakers. Grab last month announced that it would acquire
Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) have repeatedly hit new highs, but an equity analyst said the stock’s valuation remains within a reasonable range and any pullback would likely be technical. The contract chipmaker’s historical price-to-earnings (P/E) ratio has ranged between 20 and 30, Cathay Futures Consultant Co (國泰證期) analyst Tsai Ming-han (蔡明翰) told Central News Agency. With market consensus projecting that TSMC would post earnings per share of about NT$100 (US$3.17) this year, supported by strong global demand for artificial intelligence (AI) applications, and the stock currently trading at a P/E ratio of below 25, Tsai said the valuation
The artificial intelligence (AI) boom has triggered a seismic reshuffling of global equity markets, with Taiwan and South Korea muscling past European nations one by one. With its stock market now valued at nearly US$4.3 trillion, Taiwan surpassed the UK, Europe’s biggest market, earlier this month, data compiled by Bloomberg showed. South Korea is about US$140 billion away from doing the same. The tech-heavy Asian markets have shot past Germany and France in the past seven months. The shift is largely down to massive gains in shares of three companies that provide essential hardware for AI: Taiwan Semiconductor Manufacturing Co (TSMC, 台積電),
RSS