The Trump administration imposed a 32% tariff on goods from Taiwan, devastating the export industry.

Taiwan • Business • 04/09 14:43
The Trump administration imposed a 32% tariff on goods from Taiwan, devastating the export industry.

On April 9, 2025, the Trump Administration imposed a 32% tariff on Taiwanese goods, severely affecting Taiwan's export economy, particularly the traditional manufacturing and information and communication technology (ICT) industries. Pre-orders for the Nintendo Switch 2 were delayed due to U.S. tariff policies, with sales estimates revised down to 15 million units from previous projections, priced at $449.99 and scheduled for release on June 5. This event highlights the disruptions in the global supply chain.

Key Updates

04/11 11:10

The United States' imposition of a 25% tariff on imported cars has shaken the global automotive industry, leading governments and companies around the world to respond actively.

On April 3, 2025, President Trump of the United States imposed a 25% tariff on all imported cars and components, causing a global upheaval in the automotive industry. The American automotive industry strongly opposed this decision, citing concerns over supply chain disruptions and increased costs. South Korea initiated an 11 trillion won support plan to stabilize its exports, Swiss companies pursued diplomatic efforts to lessen the impact, and Taiwan was placed on the U.S. list for postponed reciprocal tariff negotiations, beginning talks. This policy is reshaping the global automotive trade landscape.

04/09 18:08

The United States' 46% tariff on Vietnam has taken effect, putting pressure on Taiwanese businesses and the garment industry, prompting the Vietnamese government to launch diplomatic efforts.

On April 9, 2025, the United States implemented a 46% tariff on Vietnamese goods, affecting Vietnam's export economy, particularly impacting industries like garments, furniture, and toys. Taiwanese businesses with factories in Vietnam, such as Eclat and Makalot, are under pressure due to reduced orders. Vietnam's Deputy Prime Minister, Ho Duc Phuc, traveled to the U.S. to negotiate, expressing a willingness to reduce tariffs on U.S. goods to zero. A Reuters/Ipsos poll shows that 57% of Americans oppose this policy, fearing it will increase consumer goods prices.

04/09 17:07

Trump urges investment as a "buying opportunity," prompting a 246-point rebound in the Dow, as the China-Europe tariff escalation leads to a 23% drop in Apple's stock price.

On April 9, President Trump of the United States urged investors to "stay calm" via social media, saying "now is a great time to buy," which helped boost the Dow Jones Industrial Average by 246 points at closing. As China and the EU imposed retaliatory tariffs on U.S. goods, global markets experienced turbulence, and Apple's stock price dropped 23% over four days, erasing more than $770 billion in market value. Trump reiterated his wish for Apple to relocate its iPhone production line back to the U.S., but analysts cautioned that this could raise costs to $3,500 per unit, putting pressure on both consumers and inflation.

04/09 16:40

US-China Trade War Escalates: US Imposes a 104% Tariff on Chinese Goods, Taiwan's Electronics Industry Confronts Supply Chain Challenges

On April 9, 2025, the United States imposed a 104% tariff on goods from China, leading to a disruption in the global laptop supply chain. Brands like ASUS, Acer, Lenovo, HP, and Dell paused shipments to the U.S. for two weeks. Taiwan, being a key supply base, is facing tariff pressures from both the U.S. and China, prompting electronics companies to adjust their supply chain and market strategies accordingly. Taiwanese companies are considering shifting production capacity to India or Mexico to avoid the impact of high tariffs.

04/09 15:11

Trump's new tariff policies have triggered global market turmoil: U.S. stocks plunge a 12%, bond market experiences volatility, retaliatory tariffs are escalating.

On April 9, 2025, President Trump of the United States imposed a 104% tariff on Chinese goods and extended it to multiple countries, which sparked global trade tensions. China and the European Union quickly retaliated, leading to a sharp decline in the U.S. stock market, with the S&P 500 index dropping 12.1%. The U.S. bond market experienced turmoil, and Deutsche Bank warned that the Federal Reserve might need to initiate emergency quantitative easing. The Nobel Prize-winning economist Paul Krugman warned that this policy could trigger a financial crisis. Trump called on investors to stay calm, saying it's a good time to buy.

04/09 14:43

The Trump administration imposed a 32% tariff on goods from Taiwan, devastating the export industry.

On April 9, 2025, the Trump Administration imposed a 32% tariff on Taiwanese goods, severely affecting Taiwan's export economy, particularly the traditional manufacturing and information and communication technology (ICT) industries. Pre-orders for the Nintendo Switch 2 were delayed due to U.S. tariff policies, with sales estimates revised down to 15 million units from previous projections, priced at $449.99 and scheduled for release on June 5. This event highlights the disruptions in the global supply chain.

04/09 14:11

US-China Trade War Escalates: Trump Announces 104% Tariff Increase, China Responds, European Economic Forecast Revised Downward, Swiss Watch Exports Affected

On April 9, 2025, U.S. President Donald Trump announced a 104% tariff on all Chinese imports, and China retaliated by increasing tariffs on U.S. goods to 84%. This action impacted the global economy, as Italy and Spain consider lowering their economic growth forecasts, and Swiss watch exports suffering. Italian Prime Minister Giorgia Meloni plans to visit the U.S. on April 17 to meet with Trump to seek ways to ease trade tensions. The U.S. has already initiated trade negotiations with multiple countries to try to resolve the trade conflict.

04/09 13:13

Trump's announcement of a tariff policy has caused market turbulence, but individual investors are still holding firm in the market.

On April 2, President Trump of the United States announced the imposition of "reciprocal tariffs" on multiple countries worldwide, which caused turmoil in the financial markets, leading to the S&P 500 index dropping by more than 12%. Despite this, many wealth management firms noted that most individual investors stayed in the market, and no large-scale sell-off was observed, particularly noting that young investors seized the opportunity to increase their investments. Advisors suggest increasing cash allocations to manage uncertainty and to avoid emotional trading.

04/09 11:38

Impact of US Tariff Policy on the Display Industry: Increased Pressure to Restructure Asian Supply Chains, Rising AMOLED Materials Costs

On April 9, 2025, the United States implemented a reciprocal tariffs policy, impacting the global supply chain and hitting the display industry. A TrendForce report indicates that optical films and AMOLED materials for displays are being taxed, putting pressure on the Asian supply chain to restructure. China imposed a 34% tariff on U.S. goods, impacting U.S. suppliers' exports to China. The end market might see a drop in demand for TVs and laptops due to increased costs and falling consumer confidence.

04/09 10:42

Due to tariffs, iPhone prices in the U.S. may increase by 12% to 43%, leading to a consumer buying spree.

On April 9, 2025, President Trump of the United States imposed a 104% tariff on Chinese imports, creating cost pressures for Apple Inc. If Apple decides to pass these costs onto consumers, iPhone prices could increase by 12% to 43%, with some high-end models seeing an increase of up to $350. This policy has sparked a buying frenzy among American consumers, resulting in a surge of crowds at Apple stores. Apple has yet to announce any price adjustments, but it may absorb some costs and pressure suppliers to reduce prices to maintain its profit margins. If the tariffs continue, price adjustments might become unavoidable.

Taiwan's Exports Depend on the US, 32% Tariff Becomes a Heavy Burden

According to the announcement by the US Customs and Border Protection, the Trump administration has imposed reciprocal tariffs ranging from 11% to 50% on 86 countries or regions starting April 9, with Taiwan being a key target, facing a tariff rate as high as 32%. This figure is derived from Trump's so-called "discount reciprocal tariff" calculation: Taiwan's trade surplus with the US of $73.9 billion divided by the total import amount of $116.3 billion, resulting in 64%, which is then halved to 32%.

Taiwan's economy is highly dependent on exports, with exports accounting for more than 60% of GDP, and exports to the US making up about 23% of total exports. The US is Taiwan's second-largest export market, following China. According to Bloomberg, if the 32% tariff continues, Taiwan's GDP may shrink by 3.8%. KPMG points out that Taiwanese exporters not only face high tax burdens but also need to clarify the origin of goods and the first sale principle, doubling the pressure on customs and taxes.

Taiwanese Businesses Struggle with Tariff Storm, Limited by Order Shifting and Factory Relocation Strategies

Faced with sudden high tariffs, Taiwanese businesses are in a dilemma. Over the past decade, many Taiwanese companies have shifted production lines from China to Vietnam, Thailand, Cambodia, and other places, but the broad scope of Trump's tariff policy, with Vietnam and Thailand facing tariffs of 46% and 36% respectively, renders the "order shifting to avoid tariffs" strategy ineffective.

President of the Macau Taiwanese Business Association, Jian Ting, pointed out that many Taiwanese businesses can only accept losses on signed orders or negotiate with buyers to share the tax burden. If the product is unique, the tariff cost may be passed on to consumers, but this will further drive up US inflation, affecting sales.

Additionally, KPMG advises that Taiwanese businesses should inventory product composition and origin certification and consider adjusting production and assembly locations. Although setting up factories in the US is a long-term solution, the high costs and complex regulations are not something all companies can bear.

Traditional Industries and ICT First to be Hit, Semiconductors Temporarily Exempt

According to the Ministry of Economic Affairs, about 65% of Taiwan's exports to the US are ICT products, including servers, computers, machine tools, and auto parts. This tariff policy directly impacts these industries. Traditional industries and agricultural products, which lack the profit margins to absorb the tax burden, are the most vulnerable.

Although semiconductors and high-end chips are temporarily exempt, they only account for 10% of exports to the US. Wedbush analyst Dan Ives warns that if tariffs extend to semiconductors, it will cut off the key supply chain of the US tech industry, leading to a stagnation in AI technology development, and the US tech industry may fall back by ten years.

Government Launches Five Major Response Strategies, $88 Billion Relief Plan in Motion

In response to the tariff impact, the Taiwanese government established the Taiwan-US Economic and Trade Group as early as November 2023, led by Deputy Premier of the Executive Yuan, Cheng Li-chun, to conduct risk assessments and negotiation preparations. Deputy Secretary-General of the Presidential Office, Chang Tun-han, stated that although 32% is an extreme scenario, it is within the government's forecast range.

The government has currently launched five major strategies, including:

  1. Initiating negotiations with the US for fairer trade conditions;
  2. Allocating $11.6 billion to support SMEs in digital and net-zero transformation;
  3. Promoting medium- and long-term economic development strategies;
  4. Expanding investment and procurement in the US to strengthen the "Taiwan plus America" strategy;
  5. Launching an $88 billion relief plan to provide financial assistance to traditional industries and agriculture.

Additionally, the government has set up an industry consultation hotline to assist businesses in applying for subsidies and adjusting operational strategies.

Switch 2 Pre-orders Postponed, Sales Forecast Revised Down to 15 Million Units

The impact of Trump's tariff policy is not limited to Taiwan's exports but also affects the global consumer electronics market. Nintendo originally planned to open pre-orders for Switch 2 in the US on April 9, but in response to the US imposing a 46% tariff on Vietnam, Nintendo announced an indefinite delay of the pre-order plan.

Switch 2 is scheduled for official release on June 5, priced at $449.99. The console features a 7.9-inch 1080p screen, 256GB storage, supports DLSS and ray tracing technology, and is backward compatible with Switch games. Launch titles include "Mario Kart World" and "Metroid."

Research firm DFC Intelligence has revised its 2025 global sales forecast for Switch 2 from 17 million units down to 15 million units, a decrease of about 12%. The firm points out that if tariffs lead to a price increase to $540, it will suppress consumer purchasing willingness. Although Nintendo has stocked up in advance, it is still difficult to ensure a stable supply.

References

People Also Ask...

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Among the five key response strategies of the Taiwanese government, which is most effective in mitigating the impact of the 32% tariff on Taiwan's economy?

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