US President Donald Trump has said that he plans to impose substantial tariffs on semiconductors and pharmaceuticals to force companies to move production from Taiwan and around the world to the US. He also said the US economy could be boosted by US$20 trillion by the end of this year, in large part due to companies moving their operations to the US to avoid tariffs.
While Trump’s tariffs face legal challenges, the US president has maintained that his “America First” trade stance would spur more domestic manufacturing and reshoring of important industries to the US. Yet, Trump’s protectionist policies have stirred significant turmoil in global supply chains and, for Taiwan in particular, it has raised concerns about whether semiconductor investment in the US and local manufacturers’ expansions overseas would reduce their operations at home, leading to an outflow of talent and the hollowing out of local industries.
National Development Council Minister Yeh Chun-hsien (葉俊顯) last week downplayed such concerns. Taiwan’s tech investment in the US is not about carving off part of its industry, but simply duplicating its development in a new location, he told a meeting of the legislature’s Economics Committee. A critical mistake of the US’ trade policies of the 1980s was in shifting a portion of its manufacturing to Southeast Asia, Yeh said. Taiwan seeks to retain manufacturing, especially critical and advanced manufacturing, while helping the US cultivate its talent pool, he added.
Manufacturers around the world are contending with the complex decision of shifting supply chains to avoid high US tariffs, and Taiwanese companies are no exception. With a declining birthrate, the nation is no longer able to shore up a large labor base in manufacturing, and the US’ tariffs give firms a motive to relocate abroad. That movement would create a short-term crisis of reduced exports, job losses and less manufacturing in some parts of Taiwan. Small and medium-sized enterprises in southern and central Taiwan would be particularly affected.
However, Pegatron Corp chairman Tung Tzu-hsien (童子賢) remains confident in Taiwan’s industrial competitiveness. At a semiconductor conference last week, Tung said that previous overseas expansions of Taiwanese firms did not hollow out local industries, but helped enhance companies’ capabilities and grow Taiwan’s influence on a global stage, because the core of research and development and the decisionmaking remain in Taiwan.
In the 1980s, Taiwan’s traditional industries, such as plastics and textiles, led the first wave of relocation to China due to the appreciation of the New Taiwan dollar, followed by upstream and midstream raw material suppliers. In about 2000, the same pattern of relocation emerged in the information and communications technology industry. However, the waves of relocation have not created a hollowing-out effect on Taiwan’s domestic industrial base, but instead have ushered in a wave of booming new industries. Intermediate goods, such as key electronic components and semiconductors, have also become the new main export items and new markets for Taiwan-made goods have been created.
A speedier relocation of Taiwanese firms could occur this time, as higher and broader US tariffs might prompt more manufacturers to expand their presence in alternative, lower-tariffed markets. As long as Taiwan retains critical technology and advanced manufacturing at home, harbors an environment conducive to the development of newer and more dynamic companies here, and further develops the EU and emerging markets to reduce dependence on a single market, while firms’ technological innovations, such as artificial intelligence and robotics, in Taiwan can outgrow their pace of relocation, the crisis could be converted into an opportunity for Taiwan’s industries.
The cancelation this week of President William Lai’s (賴清德) state visit to Eswatini, after the Seychelles, Madagascar and Mauritius revoked overflight permits under Chinese pressure, is one more measure of Taiwan’s shrinking executive diplomatic space. Another channel that deserves attention keeps growing while the first contracts. For several years now, Taipei has been one of Europe’s busiest legislative destinations. Where presidents and foreign ministers cannot land, parliamentarians do — and they do it in rising numbers. The Italian parliament opened the year with its largest bipartisan delegation to Taiwan to date: six Italian deputies and one senator, drawn from six
Recently, Taipei’s streets have been plagued by the bizarre sight of rats running rampant and the city government’s countermeasures have devolved into an anti-intellectual farce. The Taipei Parks and Street Lights Office has attempted to eradicate rats by filling their burrows with polyurethane foam, seeming to believe that rats could not simply dig another path out. Meanwhile, as the nation’s capital slowly deteriorates into a rat hive, the Taipei Department of Environmental Protection has proudly pointed to the increase in the number of poisoned rats reported in February and March as a sign of success. When confronted with public concerns over young
Taiwan and India are important partners, yet this reality is increasingly being overshadowed in current debates. At a time when Taiwan-India relations are at a crossroads, with clear potential for deeper engagement and cooperation, the labor agreement signed in February 2024 has become a source of friction. The proposal to bring in 1,000 migrant workers from India is already facing significant resistance, with a petition calling for its “indefinite suspension” garnering more than 40,000 signatures. What should have been a straightforward and practical step forward has instead become controversial. The agreement had the potential to serve as a milestone in
China has long given assurances that it would not interfere in free access to the global commons. As one Ministry of Defense spokesperson put it in 2024, “the Chinese side always respects the freedom of navigation and overflight entitled to countries under international law.” Although these reassurances have always been disingenuous, China’s recent actions display a blatant disregard for these principles. Countries that care about civilian air safety should take note. In April, President Lai Ching-te (賴清德) canceled a planned trip to Eswatini for the 40th anniversary of King Mswati III’s coronation and the 58th anniversary of bilateral diplomatic
RSS