The Executive Yuan is planning to expand its three action plans to promote investment in Taiwan and increase funding for the programs in response to US tariff policies and the resumption of the US-China trade war, a source said yesterday.
US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, although a week later he announced a 90-day pause on its implementation.
However, a universal 10 percent tariff was immediately applied to most imports from around the world, including Taiwan.
Photo: Cheng I-hwa, AFP
The Trump administration on April 12 exempted computers, smartphones and semiconductors from the new tariffs.
In light of these developments, the Executive Yuan is expanding the programs and increasing funding availability, the source said, adding that applicants would be encouraged to focus on the “five trusted industry sectors” — with a particular emphasis on the service and health industries — and demonstrate the ability to integrate artificial intelligence (AI) technologies.
The three programs — the Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan (歡迎臺商回臺投資行動方案), the Action Plan for Accelerated Investment by Domestic Corporations (根留臺灣企業加速投資行動方案) and the Action Plan for Accelerated Investment by Small and Medium-sized Enterprises (SMEs, 中小企業加速投資行動方案) — were launched on July 1, 2019, and received a three-year extension in 2022.
The five trusted industry sectors prioritized under the programs are semiconductors, AI, military industries, security and surveillance, and next-generation communications.
The Executive Yuan is also considering removing the cap that limits mid-level workers to no more than 25 percent of the total number of immigrant workers, the source said.
Additionally, the Ministry of Economic Affairs and the National Development Council are in discussions regarding an expansion of the preferential-rate line of credit and a possible reduction in interest rates, the source added.
The Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan had, as of 2022 to last year, a preferential rate line of credit up to NT$210 billion (US$6.5 billion), the Action Plan for Accelerated Investment by Domestic Corporations NT$120 billion and the Action Plan for Accelerated Investment by SMEs NT$100 billion.
While discussions had not concluded as of press time last night, the source said the expanded maximum line of credit would exceed the NT$430 billion previously offered under the three programs from 2022 to last year.
How the funding would be sourced — whether through the National Development Fund or other channels — is also still under discussion, the source added.
More than 25 percent of Taiwanese businesses operating in China are considering terminating their China-based operations, while 50 percent plan to shift their investments outside of China and into non-Chinese supply chains in response to US tariff policies, the Straits Exchange Foundation (SEF) has said.
The SEF also reported that 75 percent of Taiwanese businesses in China have seen a sharp decline in revenue, with industries such as cement, construction, plastics, rubber and textiles incurring losses exceeding 90 percent.
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