Local manufacturers of machine tools, molds, plastic products and electronic materials are expected to bear the brunt of the newly announced 20 percent US tariff, as their main competitors from Japan and South Korea face lower rates, an impact assessment report obtained by the Taipei Times showed yesterday.
The competitiveness of Taiwanese firms in these sectors is likely to decline, as Japan — Taiwan’s primary rival in the US market for the products — is subject to only a 15 percent tariff, the Industrial Technology Information Service (ITIS, 工研院產業科技國際策略發展所) said in a report.
The new US import duties add to the challenges already facing Taiwanese manufacturers, who have been squeezed by unfavorable foreign exchange rates over the past few years, the report said.
Photo: CNA
The weakening Japanese yen continues to erode Taiwan’s price competitiveness, it added.
The impact on 13 other sectors — including semiconductors, information hardware, electronic components, communications equipment and steel — is expected to remain stable for now, as the outcome of the ongoing investigation under Section 232 of the US Trade Expansion Act is still pending, the ITIS said.
Meanwhile, most hardware manufacturers — from makers of mobile phones and PCs to servers — have relocated production from China to Vietnam and Mexico to enhance flexibility amid rising geopolitical tensions, the report said.
China, Taiwan’s main rival, is subject to higher US tariffs than Taiwan.
Contract electronics maker Wistron Corp (緯創) yesterday said its production expansion plans in the US remain unchanged.
The company on Tuesday received approval from the Ministry of Economic Affairs to invest US$455 million to build server facilities in Texas, while Inventec Corp (英業達) also received approval for a US$85 million investment to establish a new server facility in the state.
The 20 percent tariff places Taiwanese firms at a competitive disadvantage, as similar products from Japan and South Korea would face a lower 15 percent levy, the Taipei-based Chinese National Association of Industry and Commerce (CNAIC, 工商協進會) said, in line with the ITIS’ assessment.
The trade group urged the government to intensify negotiations with Washington to secure more favorable terms.
Adding to the uncertainty, the US has launched a national security probe into semiconductor imports — a move widely viewed as a pretext for imposing trade restrictions on strategic sectors. As a key global chip supplier, Taiwan is likely to be caught in the crosshairs.
“Taiwan’s export resilience is being tested,” CNAIC said in a statement.
The association called for targeted efforts to secure lower US tariffs on key exports such as machine tools, molds, plastics and electronic materials — areas in which Japan already benefits from reduced tariffs.
In addition to seeking tariff relief, the CNAIC also called for stronger domestic policy support to help exporters withstand mounting external pressures.
Meanwhile, local semiconductor firms are increasingly concerned about the economic impact of potential US tariffs on chips. The results of the semiconductor investigation are expected within two weeks.
Msscorps Co (汎銓科技), a provider of advanced material analysis services for the semiconductor industry, yesterday said that its new US facility has recently begun operations, allowing the company to avoid the newly imposed 20 percent tariff on Taiwanese goods.
Msscorps said that it expects not only to emerge largely unscathed by the 20 percent tariff, but also might benefit from the new levies, which could encourage US semiconductor firms to conduct material analysis domestically rather than shipping chips overseas and back, company chairman Gino Leou (柳紀綸) told reporters yesterday.
The company in May opened its first US laboratory in Silicon Valley, with all equipment installed well in advance of the tariff’s implementation, aiming to better serve its US clients, which include Apple Inc, Nvidia Corp, Applied Materials Inc and Lam Research Corp.
Leou said the company is considering expanding the lab’s capacity by the end of this year or early next year, as one of its key customers is accelerating the development of 2-nanometer chip production in the US.
While Leou did not name the client, Taiwan Semiconductor Manufacturing Co (台積電) is the only company globally capable of producing chips at that advanced scale.
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