Taiwan Faces Economic Turmoil Amidst US Semiconductor Tariff Threat

As US President Donald Trump signals potential tariffs on semiconductors, Taiwan braces for economic repercussions. This tariff could severely impact Taiwanese exports, with semiconductor trade being a cornerstone of its economy. Ongoing negotiations aim to mitigate the potential damage from Trump's proposed tariffs under the Trade Expansion Act.

Taiwan is confronting a looming economic upheaval as US President Donald Trump considers imposing tariffs on semiconductors, according to a report by Focus Taiwan. The Chung-Hua Institution for Economic Research (CIER) highlights that this move targets a sector vital to the island's exports and economic health.

Information and communication technology (ICT) products constitute over 70% of Taiwan's exports to the United States, with semiconductors playing a critical role. CIER President Lien Hsien-ming emphasized Taiwan's significant dependence on semiconductors compared to other nations, underscoring its importance to the country's industrial and economic growth.

Trump's renewed focus on the semiconductor industry follows a USD 73.9 billion trade surplus Taiwan recorded with the U.S. in 2024, up from USD 47.8 billion in 2023. Driven by high demand for AI servers and semiconductors, this growth spotlights the island's economic reliance on these exports. President Lai Ching-te and Taiwan's negotiating team are actively addressing this issue, emphasizing the importance of avoiding detrimental trade terms.