U.S. Tariff Policy Affects Taiwanese Products: Prices of Taiwanese Soy Sauce Soar, Taiwanese Companies Look to India for Solutions

Beginning April 9, 2025, the United States will impose a 32% tariff on Taiwanese goods, affecting Taiwanese exporters. Due to the tariff, the price of Taiwanese soy sauce in the U.S. has risen from 210 NTD to nearly 300 NTD, and the bubble tea brand COMEBUY TEA is planning a 10% price increase. Some Taiwanese businesses are considering moving their production bases to India to cut down on taxes and transportation costs. The Taiwanese government has launched a contingency plan, encouraging companies to increase their investments in the U.S. and explore diverse market strategies to lessen reliance on the U.S.

Taiwanese Soy Sauce Prices Double, Consumers Say "Cooking a Meal is Getting Pricier"

Lisa, a Taiwanese business owner running a Taiwanese-style grocery store in New York, stated that all the snacks and sauces sold in her store, such as Guai Guai snacks, Prince instant noodles, and various Taiwanese sauces, are imported from Taiwan. Facing a steep 32% tariff, businesses can hardly absorb the costs and have to pass them on to consumers. For example, a bottle of Taiwanese soy sauce originally priced at 67 NTD is sold for $7 in the US (approximately 210 NTD), and with the 32% tariff, the price approaches 300 NTD.

"We really feel the pressure, as if the government is pushing us to close down," Lisa admitted. Although she currently has no plans to shut down, if Taiwanese manufacturers choose not to ship due to tariffs, she will face the dilemma of having nothing to sell.

Bubble Tea Costs Rise, Businesses Announce 10% Price Increase

The chain bubble tea brand "COMEBUY TEA" has also been affected by its expansion in the US. Ding Yichen, CEO of Huiyue International Catering Group, pointed out that the raw materials for the brand's bubble tea sold in the US are almost 100% sourced from Taiwan, including tea leaves, sugar, and tapioca pearls. After the tariff implementation, the cost of each cup of bubble tea has increased, and the price is expected to rise by at least 10%, with each cup costing up to 220 NTD.

"We pride ourselves on genuine Taiwanese flavors, and we cannot compromise on ingredients, but the cost pressure is really significant," Ding Yichen said. In addition to bubble tea, the group's 19 ramen shops and 2 soup dumpling shops in the US are also affected, as sauces, rice, and other raw materials are also sourced from Taiwan, leading to a noticeable increase in overall operating costs.

Taiwanese Businesses Turn to India for Dual Advantages in Tariffs and Shipping Costs

Facing a 32% tariff imposed by the US on Taiwan, some Taiwanese businesses originally setting up factories in Thailand and Vietnam are also affected. The US imposes a high tariff of 36% on Thai goods, catching Taiwanese businesses off guard, who were originally using the "China+1" or "Southeast Asia+1" strategy to diversify risks.

According to Max, Director of International Investment at Taiwan Enterprise Capital, some businesses have begun evaluating the transfer of production lines to India. Compared to Thailand's 36%, the US only imposes a 26% tariff on Indian goods. Additionally, India's geographical advantage allows exports to Europe and the US to bypass the Strait of Malacca, saving on shipping costs and time. Furthermore, India's relatively low labor costs have become an attractive factor for Taiwanese businesses.

"Products manufactured in India do not need to pass through the Strait of Malacca, and can go directly from the Indian Ocean to Europe and the US, saving more on shipping costs and time," Max pointed out. Although turning to India is not a panacea, under the current tax pressure, it has become a practical option for many Taiwanese businesses.

Traditional and Food Industries Hit Hardest, Brands Consider Price Increases

The tariff policy has a particularly significant impact on traditional and food industries. The pastry brand Chen Yun Bao Quan revealed that it had received an order worth 6 million NTD from a US distributor, but due to tariff issues, it has decided to suspend shipments, losing raw material costs of about 2 million NTD.

Meanwhile, 85°C, which has 82 stores in the US, is relatively less affected by tariffs as some ingredients are already locally produced, with only packaging materials still imported from Taiwan. The brand privately stated that its early strategy of setting up factories in the US has helped mitigate the impact of the current tariff storm.

Taiwanese Government and Businesses Actively Respond, Seeking Diverse Layouts

In response to the US tariff policy, the Taiwanese government has activated a contingency mechanism and proposed an industrial support plan with 9 focuses and 20 measures to help businesses cope with the impact. President Lai Ching-te also publicly stated that Taiwan will not adopt retaliatory tariffs and will use "zero tariffs" as the starting point for negotiations with the US, encouraging businesses to expand investment in the US to strengthen bilateral economic and trade cooperation.

Additionally, corporate entities suggest that Taiwanese businesses consider strengthening their market share in Europe, Japan, and Australia to reduce dependence on the US and increase the proportion of mid-range to high-end products to avoid falling into low-price competition. At the same time, they should evaluate setting up factories in South Asia or Africa as a medium- to long-term alternative solution.

References

• 獨家／台醬油售67元！出口美國價錢恐翻4倍｜東森新聞
• 「COMEBUY」赴美遇關稅！珍奶恐漲10％每杯220元
• 獨家／台醬油售67元！出口美國關稅 未來逼近300元
• 獨家／「泰出口美」課36％關稅 台商：憂心考慮遷廠印度
• 台商分散產地白忙一場？東南亞供應鏈成川普關稅重災區
• 川普「對等關稅」重點一次看 對台灣、全球影響、稅率、各國如何應變？