The US’ 20 percent tariff on Taiwanese goods, on top of existing “most-favored nation” duties and other levies, could damage manufacturing and threaten jobs, Taiwanese industry and labor groups said on Saturday, urging the government to introduce subsidies and implement policies to help workers and ease pressures on companies.
Although described by the government as “temporary,” US President Donald Trump’s new tariff rate went into effect on Thursday, adding to existing most-favored nation duties and anti-dumping or countervailing tariffs.
The additional 20 percent — higher than the 15 percent rate for Japan and South Korea — has sent shock waves through the manufacturing sector, with reports of factories in industrial parks being put up for sale.
Photo: Lin Jing-hua, Taipei Times
The Taipei-headquartered Chinese Federation of Labor (CFL) said the “cumulative tariffs” are expected to hit companies involved in machine tools, machinery, screws, bicycles, textiles, and information and communications technology especially hard.
Although the industries account for only 20 percent of exports, they support 80 percent of Taiwan’s workforce, it said.
The increases could trigger mass unemployment, it said, calling on the government to negotiate with the US to lower the rates.
Cumulative tariffs and fluctuations in the New Taiwan dollar have eroded the price competitiveness of Taiwanese goods, it said.
“Although prices remain about 10 percent lower than Japanese products, Taiwan struggles to compete on brand and quality,” leading to continued losses in orders, the organization said, adding that Taiwanese goods are now more expensive South Korean products.
The CFL urged the government to adopt countermeasures to prevent large-scale relocations overseas, warning that such a shift could trigger a major unemployment crisis.
The group also proposed that the government introduce subsidies and transition support for affected workers, ease labor and health insurance requirements, simplify applications for unemployment and unpaid leave benefits, and implement policies to stabilize exchange rates to ease export cost pressures and reduce foreign exchange losses.
The Chinese National Association of Industry and Commerce said the government should quickly clarify how the US tariffs are calculated.
It recommended holding explanatory sessions, publishing a comprehensive list of affected products, establishing a dedicated contact center and streamlining subsidy applications to help industries plan.
The Taiwan Machine Tool and Accessory Builders’ Association said the additional tariff on top of the most-favored nation levy would significantly affect the machine tool industry.
The government needs to clarify product classifications, help businesses secure preferential tariff treatment and propose response measures during the transition period, it said.
A United Daily News report cited Kuo Ai-mei (郭璦玫), chairperson of the Taiping Industrial Park Manufacturers’ Association in Taichung, as saying that in the US machine tool market, Taiwan’s main competitors are Japan and South Korea, both of which have free-trade agreements with Washington, meaning they previously enjoyed zero tariffs.
“Adding the original tariff rate of 4.5 percent brings Taiwan’s total tariff rate to 24.5 percent,” which is nearly 10 percent more than that of Japan and South Korea, Kuo said.
The NT dollar’s exchange rate against the US dollar also affects the price competitiveness of exporters worldwide, she added.
In particular, over the past few months, the NT dollar has appreciated by about 13 percent, which is highly unfavorable for exporters, as it squeezes profit margins, she said.
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