The impact of US President Donald Trump’s 32-percent tax on goods from Taiwan, which was announced yesterday and is to be implemented next Wednesday, would “exceed expectations,” the Chinese National Association of Industry and Commerce (CNAIC) said in a statement this morning.
The CNIAC warned that the tariffs would pose significant challenges for Taiwan’s export-driven economy and recommended five immediate countermeasures.
The new tariff policy, announced yesterday, aims to “address the injustices of global trade, reshore manufacturing and drive economic growth for the American people," the White House said.
Photo: Taipei Times
Trump would impose "reciprocal tariffs" on US trading partners, with higher rates for countries with larger trade surpluses, including a tariff of 34 percent imposed on China and a 24-percent tariff for Japan.
The reciprocal tariffs do not include semiconductors, energy, pharmaceuticals and "certain minerals that are not available in the United States," according to a White House fact sheet.
Trump is, however, planning separate tariffs to target semiconductors, a White House official said.
The CNAIC suggested immediately activating crisis response measures, conducting a comprehensive review of the potential impacts and strengthening communication with the US.
It further proposed negotiating to lower the tariffs and providing tax relief and financial assistance to affected industries in Taiwan.
Taiwan was the US’ seventh-largest trading partner last year, according to an Executive Yuan trade report.
Taiwan plays a critical and strategic role in the US economy, producing 90 percent of the world’s advanced semiconductors, the American Chamber of Commerce in Taiwan (AmCham) said in a news release this morning.
US industries rely heavily on Taiwan for high-value, capital-intensive products that cannot be mass-produced elsewhere, such as semiconductors, information and communication technology (ICT) and precision machinery, AmCham said.
Moreover, Taiwan’s microchips significantly impact global supply chains and are essential to US industries from technology to cars; aerospace engineering to national defense, it said.
As both sides of the Pacific are facing an increasingly complex geopolitical landscape, the US and Taiwan should seek to strengthen existing economic and trade relations, it said.
In response to shifting global trends and industries, AmCham called for Washington and Taipei officials to continue to promote exchange and cooperation, to support industrial development, market stability, supply chain security and regional peace.
Furthermore, US exports to Taiwan have almost no domestic competition, with imported goods including agricultural products, aircraft and industrial machinery, AmCham said.
US-Taiwan investments have also been trending upwards, with Taiwan's cumulative direct investment in the US reaching US$17.1 billion in 2022, it added.
In the first 10 months of 2024, investments reached US$14 billion, accounting for 30.8 percent of Taiwan’s total outbound investments, it said.
Taiwan is also a critical source of capital in US financial markets, holding approximately US$256 billion in US Treasury securities as of January last year, ranking among the top ten foreign holders, it added.
Taiwan therefore stabilizes the US financial markets and plays an important role in the flow of US capital, it said.
Through continued investment in the US economy, Taiwanese businesses have contributed significantly to creating local jobs and stabilizing financial markets in the US, while making a significant contribution to supply chain resilience, it said.
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