Even under a worst-case scenario of Taiwan cutting tariffs on US vehicles to zero, the impact on the local auto industry’s production value would be about 1 percent — which remains manageable, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday.
Based on the ministry’s initial assessment, the short-term impact would be limited because imported US vehicles are mainly high-end models, while domestically made cars serve the low to mid-price market, Kung told reporters following a meeting with industry representatives.
Taiwan and the US are reportedly expected to sign the Agreement on Reciprocal Trade before the Lunar New Year holiday, with Vice Premier Cheng Li-chiun (鄭麗君) heading to Washington last night and tariffs on US vehicles drawing particular attention.
Photo: CNA
Taiwan would define “US-made” vehicles in line with international standards, Kung said. The WTO standards for US-made vehicles require at least 35 percent US added value.
Negotiations on passenger cars and light commercial vehicles would be handled separately, meaning the outcomes might not be identical, he said.
The government has no plans to adjust tariffs on vehicle imports from Europe or other nations, he added.
Kung said the government has earmarked about NT$3 billion (US$95.1 million) to support domestic automakers and auto parts suppliers in research and development (R&D), and upgrading international certification in the face of medium to long-term uncertainties.
At the same time, the government is also studying the feasibility of lowering tariffs on automotive components not produced locally, such as car interiors and plastic parts, to help local manufacturers reduce costs, he said.
The ministry would submit the proposal to the Legislative Yuan after industry representatives reiterated their request, he added.
Although most Taiwanese automakers still rely on technology licensing from foreign parent companies, the NT$3 billion fund would help them build R&D capabilities and enhance their international competitiveness, Industrial Development Administration Director-General Chiou Chyou-huey (邱求慧) said.
The fund would not only cover vehicle manufacturers, but also extend to upstream and downstream suppliers, including equipment and mold makers, Chiou said.
If automakers seek to expand overseas, the government would subsidize international certification and verification expenses, he said.
Kung also said the government would encourage Taiwanese automakers and parts suppliers to expand overseas, instead of relying solely on the domestic market.
He pointed to Hon Hai Precision Industry Co’s (鴻海精密) Mobility in Harmony electric vehicle development platform, saying that the alliance has cooperated with Japanese automakers and shipped vehicles to that nation.
Representatives from the Taiwan Transportation Vehicle Manufacturers Association (台灣車輛公會) and domestic automakers attended yesterday’s closed-door meeting.
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