Trump's tariff policy in 2025 severely hits Taiwan's agriculture and fisheries industries, Singapore refrains from retaliation, BNP Paribas downgrades its rating on U.S. stocks.
In early April 2025, President Trump of the United States announced the imposition of import tariffs ranging from 10% to 50% on more than 180 countries globally, with additional tariffs based on trade deficits. Taiwan faced a 32% tariff, severely affecting its agricultural and fishery exports. Singapore, facing a 10% tariff, chose not to retaliate and emphasized deepening cooperation. In response to the policy risks, BNP Paribas downgraded its rating of U.S. stocks to "underweight," warning about the risk of stagflation in the U.S. economy.
Key Updates
04/08 06:43
Trump's tariff policy in 2025 severely hits Taiwan's agriculture and fisheries industries, Singapore refrains from retaliation, BNP Paribas downgrades its rating on U.S. stocks.
In early April 2025, President Trump of the United States announced the imposition of import tariffs ranging from 10% to 50% on more than 180 countries globally, with additional tariffs based on trade deficits. Taiwan faced a 32% tariff, severely affecting its agricultural and fishery exports. Singapore, facing a 10% tariff, chose not to retaliate and emphasized deepening cooperation. In response to the policy risks, BNP Paribas downgraded its rating of U.S. stocks to "underweight," warning about the risk of stagflation in the U.S. economy.
Taiwan's Agricultural and Fishery Product Exports Severely Impacted
On April 3, the Trump administration announced a 32% retaliatory tariff on Taiwan, calculated based on the U.S. trade deficit with Taiwan. This move has directly impacted Taiwan's agricultural and fishery exports. According to the Ministry of Agriculture, Taiwan's agricultural exports to the U.S. in 2024 are estimated at approximately $890 million, with major items including moth orchids, edamame, tea, tilapia, barramundi, and dolphinfish.
During a forum held by the Tainan City Government with agricultural and fishery producers, several industry representatives reported a suspension of U.S. orders. The Taiwan Orchid Growers Association noted that the 32% tariff has nearly swallowed up the profits from orchid exports, necessitating short-term government export incentives. The Taiwan Tilapia Association stated that tilapia orders to the U.S. have stalled, and aquaculture farmers are hesitant to order fingerlings, possibly switching to other species.
According to the Fisheries Agency of the Ministry of Agriculture, Taiwan exported 4,618 metric tons of frozen barramundi in 2024, with 1,197 metric tons sold to the U.S. Tilapia exports totaled 16,859 metric tons, with 13,257 metric tons going to the U.S., accounting for over 70%. Dolphinfish returned to the U.S. market last year, with auction sales of about $8 million, and the industry fears the new tariff will again hit sales.
Taiwan's Executive Yuan has launched a response plan with a total of NT$880 billion, covering "9 major aspects and 20 measures," with the Ministry of Agriculture responsible for NT$180 billion, including financial support, industry upgrades, and market expansion. President Lai Ching-te emphasized choosing not to retaliate and proposed negotiating with the U.S. from a "zero tariff" starting point.
Singapore: No Retaliation but Highly Vigilant
Singapore's Prime Minister Lawrence Wong expressed disappointment with Trump's tariff policy, noting that Singapore has a trade deficit with the U.S. and has had a free trade agreement since 2004, which should exempt it from tariffs. However, Singapore is still subject to a 10% base tariff.
Wong stated that Singapore will not impose retaliatory tariffs but will establish a national task force to support affected businesses and workers and strengthen cooperation with like-minded countries. Deputy Prime Minister Heng Swee Keat noted that Singapore has signed 27 free trade agreements and is actively participating in regional cooperation mechanisms such as the CPTPP and RCEP.
Maybank economist Lee Soon Rong pointed out that if Trump further imposes a 25% tariff on pharmaceuticals and semiconductors, it will have a greater impact on Singapore's manufacturing sector, as these two industries account for about 40% of the manufacturing sector.
BNP Paribas Downgrades U.S. Stock Rating
In response to the global market turmoil triggered by Trump's tariff policy, BNP Paribas Wealth Management (BNP Paribas) released a report on April 8, downgrading the U.S. stock rating from "neutral" to "underweight," noting that the policy will exert dual pressure on consumer power and corporate costs.
The bank noted that the average U.S. tariff rate has risen from 2.5% before Trump took office to 22%, reflecting that high tariff policies may become the norm. The report warned that rising import prices, pressure on corporate profits, the risk of retaliatory tariffs, and policy uncertainty will expose the U.S. to the risk of "stagflation."
In terms of asset allocation, BNP Paribas advised investors to become more cautious and favored U.S. 10-year Treasury bonds, predicting a yield drop to 4% within three months. At the same time, the bank favored government bonds from core countries in the Eurozone and high-rated corporate bonds, and expected the euro to fall back to 1.05 against the dollar.
BNP Paribas also pointed out that the U.S. stock market is overly concentrated in large-capitalization stocks, with high valuations, coupled with regulatory risks and potential European retaliatory measures, which are the main reasons for the downgrade. In contrast, the bank remains optimistic about the UK, Japan, and some emerging markets but reminds investors to assess each market's dependence on international trade and sensitivity to U.S. tariff policies.
Global Market Reactions and Follow-up Observations
Following the announcement of Trump's tariff policy, global stock markets experienced significant volatility. Taiwan's stock market plummeted by more than 2,000 points on April 7, with TSMC and Hon Hai's stock prices hitting the limit down. All 11 major sectors of the U.S. stock market closed in the red, with the Dow Jones index losing over $6 trillion in market value. Asian markets also generally declined, with the Nikkei index down 7.8% and the Hang Seng index plunging 13.2%.
Although Trump stated that it was "not intentional," he emphasized that "bitter medicine is good for you," and the market continues to watch whether countries will take retaliatory measures. China has announced a 34% tariff on U.S. goods starting April 10, and the EU is also evaluating countermeasures.
