Taiwan expects small impact from Trump tariffs on chip exports

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By Wen-Yee Lee

TAIPEI- Taiwan only expects a small impact from any tariffs imposed by the incoming government of US President-elect Donald Trump on semiconductor exports given their technological superiority, Economy Minister Kuo Jyh-huei said 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

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But Taiwanese policymakers have warned new US 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 percent on global imports into the United States and a far higher 60 percent tariff on Chinese goods. In late November, he specifically pledged a 25 percent tariff on imports from Canada and Mexico when he takes office on Jan. 20.

Asked at a news conference about the impact on Taiwan’s export orders of Trump’s tariffs, Kuo said it would not much 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 help companies relocate supply chains to the United States as needed, away from where there might be high import tariffs, Kuo said.

“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 US aerospace companies, so that some of Taiwan’s aerospace research and development centers can be moved to there.”

Taiwan will also set up an office in Japan in the first half of this year to help Taiwanese businesses invest there, and cooperate with the country on AI and drones, he added.

Taiwan’s exports rose more than expected in December, buoyed by robust demand for semiconductors from the artificial intelligence (AI) industry and continued, although weaker, demand from China.

Exports rose 9.2 percent from the same month a year ago to $43.59 billion, its second-highest level, the finance ministry said on Thursday, beating a forecast of 6.5 percent growth in a Reuters poll. The increase, although slightly below November’s gain of 9.7 percent, marked the 14th straight monthly rise.

The ministry said the growth outlook into the first quarter was stable because of demand for semiconductors for AI, but said January exports could fall between 1 percent and 4 percent on year because of the long Chinese lunar new year holiday.

People in China usually travel to their hometowns ahead of the festival, which starts on January 29 this year, and many businesses close for an extended period. — Reuters

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