Taiwan’s GDP growth this year is expected to decrease by 0.43 to 1.61 percentage points due to the effects of US tariffs, National Development Council (NDC) Minister Paul Liu (劉鏡清) said at a meeting of the legislature’s Economics Committee in Taipei yesterday, citing a preliminary estimate by a private research institution.
Taiwan’s economy would be significantly affected by the 32 percent “reciprocal” tariffs slapped by the US, which took effect yesterday, Liu said, adding that GDP growth could fall below 3 percent and potentially even dip below 2 percent to 1.53 percent this year.
The council has commissioned another institution for further assessments of the economic impact and the nation’s growth outlook, he said.
Photo: Liao Chen-hui, Taipei Times
The Directorate-General of Budget, Accounting and Statistics in late February forecast Taiwan’s GDP to expand 3.14 percent this year.
Asked by Democratic Progressive Party (DPP) Legislator Lee Kuen-cheng (李坤城) whether the government would increase its planned NT$88 billion (US$2.67 billion) relief fund for local industries, Minister of Economic Affairs J.W. Kuo (郭智輝) said the total would remain unchanged for the time being, but could be adjusted higher for affected sectors as appropriate.
In response to a question by DPP lawmaker Chiu Yi-ying (邱議瑩) about tariff negotiations with the US, Kuo said Taiwan maintains good relations with Washington and the outlook for the negotiations looks promising.
The government has formed a task force led by Vice Premier Cheng Li-chun (鄭麗君), which includes officials from the National Security Council (NSC), the Office of Trade Negotiations and Executive Yuan agencies, as well as academic and industry representatives.
NSC Director-General Tsai Ming-yen (蔡明彥) said that Taipei has already approached Washington to discuss the tariffs, hoping it can come to a quick agreement between the two sides.
Speaking to reporters at the Legislative Yuan, Tsai said the government’s position was not to take retaliatory measures, but to come up with more specific solutions.
President William Lai (賴清德) has instructed officials to initiate “strategic communication” between Taiwan and the US, he added.
“Last weekend, we used channels to talk to the US to reflect our position on Taiwan-US tariff negotiations and some of our proposals,” Tsai said, without giving details.
Separately, Kuo said that the economic ministry would expand its one-stop service center and assemble a team of consultants to offer practical solutions to traditional industries as well as small and medium-sized enterprises (SMEs) seeking assistance.
“We will require our one-stop service center and consulting team to respond to companies’ questions within one day, and make sure to provide them with practical and tailor-made solutions,” the minister told lawmakers.
To expand support for exporters, the ministry has also agreed to increase preferential loans and loan guarantees, provide subsidies for companies' R&D and business transformation, and help firms win overseas orders, Kuo said.
In addition, the government would abolish the requirement of a 15 percent revenue decline for industries applying for government financial aid or loans, allowing more firms to deal with the impact of the US tariffs, he said.
Taiwan is home to 1.68 million SMEs, accounting for 98.9 percent of all businesses and providing more than 9 million jobs, the ministry’s data showed.
The nation’s traditional manufacturing sector, dominated by producers of metal products, machinery and plastics, accounts for more than 90 percent of the total value of the manufacturing industry and generates NT$11.24 trillion in total production value, ministry data showed.
Additional reporting by Reuters
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