The Executive Yuan yesterday decried US President Donald Trump’s 32 percent tariff on Taiwanese goods announced hours earlier as “unfair,” saying it would lodge a representation with Washington.
The Cabinet in a statement described the pledged US tariffs, expected to take effect on Wednesday next week, as “deeply unreasonable” and “highly regrettable.”
Cabinet spokeswoman Michelle Lee (李慧芝) said that the government would “lodge a solemn representation” with the US Trade Representative and continue negotiating with Washington to “ensure the interests of our nation and industries.”
Photo: Ann Wang, Reuters
Trump at a news conference in Washington on Wednesday announced a 10 percent baseline tariff on most goods imported to the US, set to take effect tomorrow.
However, Taiwan and dozens of other countries, including some of the US’ main trading partners, are to face much higher duties, in what Trump described as an effort to address “unbalanced” trading relationships, reduce trade deficits and boost US manufacturing capacity.
Certain goods, such as copper, pharmaceuticals, semiconductors, lumber, energy and “certain critical minerals,” would be exempt, the White House said.
The planned 32 percent tariff was “unfair to Taiwan,” as it “does not accurately reflect the trade and economic situation” between the two sides, Lee said in the statement.
Taiwan’s exports to the US have increased significantly in the past few years mainly because of a surge in demand from the US for semiconductors and artificial intelligence (AI)-related products, Lee said.
Many Taiwanese information and communications firms relocated manufacturing from China to Taiwan due to US tariffs on goods from China in Trump’s first term and US technology control policy against China over national security concerns, she said.
In that regard, Taiwan should not be subject to high tariffs in view of its “tremendous contributions to the US economy and national security,” she said.
Taipei has been cracking down on transshipment by Taiwanese producers, a practice by which goods are routed through a third country to alter their country of origin to benefit from lower duties, Lee said.
Taiwan should not be treated in a similar way as Vietnam, which is to face a 46 percent tariff, Cambodia (49 percent) and Thailand (36 percent), where the problems of transshipment are more pronounced, she said.
Moreover, the methodology, scientific basis and international trade theory behind the tariff measures are “unclear,” she said.
The US last year had a trade deficit with Taiwan of about US$73.9 billion, a year-on-year increase of 54.6 percent, making Taiwan the sixth-largest contributor to the US’ deficit, Executive Yuan data showed.
Total bilateral trade was US$158.6 billion last year, up 24.2 percent from the previous year, the data showed.
Trump’s tariffs would target computers, computer parts and integrated circuits that together compose the bulk of the nation’s exports to the US.
Last year, Taiwan exported US$51.49 billion of data processing equipment and parts, and US$7.4 billion of integrated circuits to the US, or 46.2 percent and 6.7 percent of the total volume respectively, the data showed.
In February, Taiwan’s top three US exports were computers (US$6.84 billion), computer parts (US$649 million) and integrated circuits (US$546 million), 58.1 percent, 5.5 percent and 4.6 percent respectively of the total trade volume, the data showed.
Tariffs on those products would affect the Taiwanese and US economies, as the nation’s servers and chip-based products have sustained the rise of the AI sector, an official said on condition of anonymity.
The exemption of semiconductors from the US tariffs would have a limited effect on trade, as most Taiwanese chips are packaged in Mexico, Vietnam, Thailand or India before being sold to the US tech industry, the official said.
Taiwan’s biggest direct trade partner for chips last year was China, which bought US$85.26 billion of the nation’s semiconductors, or more than half of all chip exports, the official said.
The next largest importers of Taiwanese semiconductors were Singapore, South Korea, Japan and Malaysia, the official added.
President William Lai (賴清德) yesterday afternoon said that Taiwan finds Trump’s policies unreasonable and is concerned about the effect on the global economy.
Lai made the comments on Facebook after convening an emergency Cabinet meeting at the presidential residence.
Premier Cho Jung-tai (卓榮泰) and other Cabinet officials were ordered to unveil the government’s response to the tariffs as soon as possible and save no effort in their negotiations with Washington, Lai said.
Additional reporting by Chen Yun
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