Mexico’s planned tariff hikes would have a limited effect on Taiwan, as the measures do not target information and communications technology (ICT) products, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday.
Most ICT products that Taiwan exports to Mexico — including electronic components and semi-finished goods — remain covered by the WTO’s Information Technology Agreement, and would therefore be exempt from the higher tariffs, Kung said on the sidelines of an economic forum in Taipei.
Mexican lawmakers last week backed a measure to raise import duties to as high as 50 percent from 15 to 20 percent on goods from countries that do not have a free-trade agreement with it. The affected nations include Taiwan, Brazil, China, India, Indonesia, Nicaragua, South Africa, South Korea, Thailand, Vietnam and the United Arab Emirates.
Photo: CNA
Auto parts, light vehicles, textiles, clothing, furniture, plastics, household appliances, cosmetics and cleaning products are among the products that would be affected.
Taiwan’s automotive electronics are expected to be impacted as well, as the US has required Mexico to impose tariffs to prevent origin fraud by Chinese manufacturers, Kung said.
If Mexico were to impose tariffs on ICT products, it would undermine server assemblers’ willingness to set up factories there, and Mexico is unlikely to “cut off its own limbs,” he said.
Separately, Politico on Sunday reported that only 23 percent of Taiwanese goods sold to the US are subject to Washington’s “reciprocal” tariffs — the lowest share among the US’ biggest trading partners — which the US publication described as “enormous holes.”
Commenting on the report, Kung said that about 70 percent of Taiwan’s exports to the US are ICT products that are not subject to “reciprocal” tariffs, but are pending an ongoing investigation under Section 232 of the US Trade Expansion Act.
“It is not a matter of whether the US tariff policy has loopholes,” he said.
The minister said he expects Taiwan to have greater room for negotiations on trade with the US and be able to gain more favorable treatment, given the nation’s industrial competitiveness, and its contribution to global supply chains and support of the US.
Kung also said he anticipates strong artificial intelligence (AI) demand to lift Taiwan’s economy next year above the 3.54 percent growth estimate made last month by the Directorate-General of Budget, Accounting and Statistics.
As AI demand remains robust, the market is constrained more by supply than by demand, he said.
“The answer will depend on how much our supply chains, especially Taiwan Semiconductor Manufacturing Co (台積電), can produce,” he added.
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