Taiwan has pledged to support companies seeking to relocate to the United States in response to US President Donald Trump’s new tariffs, offering assistance in finding investment opportunities and local partners, the country’s economy ministry announced on Monday.
The latest round of US tariffs, which impose a 25% levy on imports from Mexico and most goods from Canada, as well as a 10% tariff on Chinese imports, have sent shockwaves through global markets, raising fears of a wider trade war.
Taiwan steps in to assist affected firms
Taiwan’s economy ministry outlined a comprehensive support plan to help Taiwanese firms navigate the shifting trade landscape.
- The government will provide detailed information on potential US states for investment, local regulations, and business incentives.
- Assistance will be offered in finding American business partners for collaboration and joint ventures.
- Taiwan’s Industrial Technology Research Institute (ITRI) branches in North America will promote research, development, and manufacturing partnerships between Taiwanese and US firms.
The ministry emphasised that it would monitor international trade developments closely and maintain direct communication with businesses to ensure they receive timely support.
“We will provide the most timely support and assistance to ensure that companies find the best strategies to cope with these changes,” the statement said.
Taiwan’s key industries hit hard by tariffs
Taiwan’s economy is particularly vulnerable to Trump’s tariffs due to its heavy reliance on global supply chains, especially in the technology sector. Taiwanese firms are major suppliers of semiconductors and electronic components, with many operating factories in China and Mexico, both of which have been targeted by the new US trade measures.
Adding to concerns, Trump has also hinted at potential future tariffs on imported semiconductor chips, a move that could significantly disrupt Taiwan’s high-tech manufacturing sector.
Stock market plunge reflects investor fears
The financial markets in Taiwan reacted sharply to the news.
- Shares in Foxconn, the world’s largest electronics manufacturer, fell 8% on Monday.
- Quanta Computer, a key supplier of laptop components, saw its stock drop 10%.
- Inventec, another major Taiwanese manufacturer, also experienced an 8% decline.
- Taiwan’s benchmark stock index slumped by 4%, reflecting broad investor concern over the potential economic impact.
Monday’s sharp declines came as Taiwanese markets reopened following the week-long Lunar New Year holiday, during which global trade tensions escalated.
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A global trade war on the horizon?
While the details of Trump’s tariff policies remain unclear, the immediate market response underscores fears of a prolonged trade war that could impact global supply chains, corporate profits, and economic growth.
- Mexico and Canada, America’s two largest trading partners, have vowed retaliatory tariffs on US goods.
- China, already locked in a trade dispute with the US, is expected to respond with countermeasures.
- Investors fear that tariffs will lead to rising costs, supply chain disruptions, and higher inflation.
For Taiwan, the situation presents a complex challenge. While the country seeks to strengthen trade ties with the US, the reliance of its businesses on Mexico and China means that American tariffs could disrupt operations and increase production costs.
What’s next for Taiwan?
With Trump’s tariffs now in effect, Taiwanese businesses will need to make swift adjustments to avoid major disruptions. The government’s support package aims to mitigate risks, but it remains to be seen whether companies will follow through with relocations to the US.
Meanwhile, global markets will be watching closely as tensions escalate, with the possibility of further trade restrictions looming. Taiwan’s ability to adapt to these challenges will be crucial in maintaining its economic stability and competitiveness in an increasingly volatile trade environment.
