Taiwan’s Response to U.S. Tariffs on Semiconductors

By Wen-Yee Lee

TAIPEI (Reuters) – Taiwan only expects a small impact from any tariffs imposed by the incoming government of U.S. President-elect Donald Trump on semiconductor exports, given their technological superiority. Economy Minister Kuo Jyh-huei stated this on Friday.

Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), the island is a key link in the global technology supply chain for companies such as Apple and Nvidia.

However, Taiwanese policymakers have warned that new U.S. tariffs against all countries from the Trump administration could curb economic growth this year for the export-dependent economy.

Trump has pledged a blanket tariff of 10% on global imports into the United States and a far higher 60% tariff on Chinese goods. In late November, he specifically pledged a 25% tariff on imports from Canada and Mexico when he takes office on Jan. 20.

When asked at a news conference about the impact on Taiwan’s export orders from Trump’s tariffs, Kuo said it would not significantly affect the chip sector. “For our semiconductors and advanced processes, there is an advantage of technological leadership and that cannot be replaced, and so the impact will be small,” he added.

Taiwan will also assist companies in relocating supply chains to the United States as needed, to avoid high import tariffs, Kuo noted. “Now we see that we should be able to develop the aerospace supply chain industry in the United States, and do some joining up with the U.S. aerospace companies, so that some of Taiwan’s aerospace research and development centres can be moved there.”

Additionally, Taiwan plans to establish an office in Japan in the first half of this year to aid Taiwanese businesses in investing there and to cooperate on AI and drones, Kuo added.