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Trump’s Tariff Bomb: How a 60% Tariff on Chinese Goods Could Drive Taiwanese Companies Out of China

Trump’s Tariff Bomb: How a 60% Tariff on Chinese Goods Could Drive Taiwanese Companies Out of China

With the American president-elect Donald TrumpAfter promising a massive 60% tariff on Chinese imports, Taiwan’s government is bracing to support its companies as they consider leaving China. Taiwan’s Economy Minister Kuo Jyh-huei outlined plans to help companies shift production and minimize the impact on Taiwan’s crucial technology and electronics sectors.

If Trump focuses on Chinese-made goods with hefty ratesHe also calls for “protection fees” from Taiwan’s Taiwan Semiconductor Manufacturing Co. (TSMC). With the stakes high for global chip supply, Taiwan’s Economic Minister assures TSMC’s U.S. jobs should secure CHIPS Act support, but Taiwan is bracing for changing trade dynamics.

US President-elect Donald TrumpTaiwan’s proposed economic policy includes a 10 percent tariff on all US imports, which Taiwan’s Economic Minister Kuo Jyh-huei said on Thursday would have minimal effect on Taiwan directly. However, a proposed 60 percent tariff on Chinese-made products is expected to have a more substantial impact on Taiwanese companies operating in China, including those within Taiwan’s technology and electronics sectors.

Challenges for Taiwanese companies in China

Minister Kuo acknowledged this TrumpChina’s presidency could lead to more Taiwanese companies operating in China relocating to Taiwan. Kuo announced Thursday that the government will support Taiwanese companies seeking to move production out of China, as newly elected US president Donald Trump’s proposed tariffs on Chinese imports could significantly impact their operations.

Trump, who will come to power in January, has promised to impose a 60% premium. rate on U.S. imports of Chinese goods, a move that could have broad economic consequences for China. Taiwan, whose companies have invested heavily in China over the past four decades, is closely watching how these tariffs could impact Taiwanese companies that have historically relied on China’s lower production costs.

“We will provide support to Taiwanese companies to relocate their production bases as soon as possible,” Kuo said.

Impact on TSMC and the US CHIPS Act

In response to Trump’s comments suggesting that Taiwan should pay “protection fees,” Kuo expressed concerns about the possible implications for U.S. subsidies to Taiwan Semiconductor Manufacturing Co. (TSMC), a critical player in the semiconductor supply chain. Kuo expressed confidence that the jobs provided by TSMC’s U.S. facilities should help secure the stability of the CHIPS Act.

In a recent interview with podcaster Joe Rogan, Trump described the CHIPS Act as “so bad,” arguing that tariffs would have been a simpler approach to boosting domestic manufacturing. He also suggested that Taiwan had “stolen” the U.S. chip industry, a sentiment Kuo disputed as a “misunderstanding.”

According to Kuo, industry experts recognize that the U.S. and Taiwan have a mutually beneficial relationship in the semiconductor supply chain, with Taiwan’s advanced chip manufacturing capabilities providing competitive advantages for U.S. technology companies.

He assured that the Taiwanese government is preparing policies to support companies seeking to diversify their supply chains and adapt to changing trade policies.

Kuo noted that TSMC will continue discussions with US policymakers to ensure a stable environment for its operations while aligning with US strategic interests.