Taiwan to Assist Companies Relocating from China

TAIPEI (Reuters) – Taiwan will help companies relocate production from China due to the likely large impact from incoming U.S. tariffs promised by President Donald Trump, Economy Minister Kuo Jyh-huei stated on Thursday.

A threat by Trump, who will take office in January, to impose 60% tariffs on U.S. imports of Chinese goods poses significant growth risks for the world's second-largest economy.

Taiwanese companies have invested billions of dollars in China over the past four decades, attracted by historically lower costs. However, the Taiwanese government, concerned about increased pressure from Beijing regarding Chinese sovereignty claims, has been promoting the relocation of investments.

In a parliamentary session, Kuo noted that the effect of potential Trump tariffs on Chinese goods for Taiwanese companies would be "quite large." He mentioned plans to provide assistance to Taiwanese firms in moving production bases, though specific details were not disclosed.

Kuo also addressed inquiries from lawmakers regarding fears that Trump might cancel subsidies for TSMC, the largest contract chipmaker globally, which is investing $65 billion in new factories in Arizona, USA. Kuo mentioned that there is a contingency plan, including support for companies in the supply chain to relocate to the U.S.

"It is a trend for TSMC to keep expanding its investment in the United States," he remarked. TSMC has not commented on concerns over subsidies, but its shares listed in Taipei rose about 1% on Thursday morning.

Furthermore, Taiwan's GlobalWafers, which is investing $4 billion in the U.S., expressed optimism that the Chips and Science Act, aimed at encouraging chipmakers' investments in the United States, would persist under the new administration.

"Multi-year and decadal programs like the CHIPS Act and the agreements we have signed are typically continued across administrations," they stated. "We expect the CHIPS program to follow suit and operate smoothly under the Trump administration."