Taiwan has labeled US President Donald Trump’s newly announced 32% tariffs on its imports as “highly unreasonable” and “unfair,” prompting the island nation to pledge “serious negotiations” with Washington. The sweeping tariffs, unveiled overnight, have sparked outrage in Taipei, which had hoped to avoid such measures through increased investments in the US, energy purchases, and boosted defense spending. This article explores the implications of Trump’s trade policies on Taiwan’s economy, particularly its critical tech sector.
Taiwan’s Response to Trump’s Tariffs
The Taiwanese government, via the Executive Yuan, expressed deep regret over the decision. Cabinet spokeswoman Michelle Lee stated, “The Executive Yuan found the decision highly unreasonable and deeply regretted it, and will initiate serious negotiations with the United States.” Taiwan had actively sought to mitigate the risk of tariffs by promising significant economic contributions to the US, including a massive $100 billion investment by chipmaking giant TSMC in American manufacturing plants.
Why Taiwan Considers the Tariffs Unfair
Taiwan’s trade surplus with the US reached $73.9 billion in 2024, making it the seventh-highest globally. Around 60% of its exports to the US consist of information and communications technology (ICT) products, including semiconductor chips, a sector where Taiwan holds a dominant position. Lee argued that this surplus reflects surging US demand for Taiwanese tech, driven partly by Trump’s earlier tariffs and export controls on China during his first term.
“The surge in US demand for Taiwan’s ICT products reflects Taiwan’s significant contribution to the US economy and national security, yet Taiwan is now being hit with high tariffs,” Lee emphasized. She added that the tariffs fail to reflect the true nature of Taiwan-US trade relations.
Impact on the Semiconductor Industry
While semiconductor chips themselves were excluded from the 32% levy, analysts warn that tariffs on related components could disrupt Taiwan’s chip industry—a cornerstone of the global economy. Taiwan dominates the production of advanced chips, with companies like TSMC supplying tech giants worldwide. Minister of Economic Affairs Kuo Jyh-huei revealed that Taiwan had prepared contingency plans for tariffs ranging from 10% to 25%, showcasing proactive measures to protect local industries.
Taiwan’s Efforts to Avoid Tariffs
In addition to TSMC’s investment, Taiwan pledged to buy liquefied natural gas from Alaska and increase defense spending to over 3% of its GDP. These efforts aimed to strengthen economic ties with the US and deter punitive trade measures. However, Trump’s recent rhetoric, accusing Taiwan of “stealing” the US chip industry and threatening tariffs as high as 100% on semiconductors, has heightened tensions.
What’s Next for Taiwan-US Relations?
As Taiwan gears up for negotiations, the stakes are high for both nations. The outcome could reshape trade dynamics and influence the global supply chain for technology. For more on this developing story, check updates from Planet Today.
