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

Taiwan • Business • 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.

Key Updates

04/11 13:09

Wells Fargo's first quarter profit surpassed expectations, CEO warns of potential economic impact of tariff risk in 2025.

Wells Fargo, the fourth-largest bank in the United States, announced its first-quarter earnings report on April 11, 2025, with a net profit of $4.89 billion, a 6% increase from the previous year, and earnings per share (EPS) of $1.39, exceeding the market expectation of $1.24. CEO Charlie Scharf warned that the U.S. government's recent tariff increases could hinder economic growth and stated that the bank is prepared for an economic slowdown in 2025. This statement dampened the optimistic sentiment in the banking industry, resulting in Wells Fargo's stock price rising only 1% on the day the earnings report was released.

04/11 12:39

Trump's 90-day tariff postponement did not stabilize the markets: the Asian stocks decline, the gold prices reach a new high, the yen soars to a two-year high

On April 9, President Donald Trump announced a 90-day suspension of higher tariffs on 75 countries, excluding China, in an effort to ease trade tensions, but this move failed to boost market confidence. Asian stock markets briefly rebounded but then fell back, with the Nikkei 225 index plunging 5.4%. The safe-haven sentiment drove gold prices to a record high, and the yen reached a two-year high against the dollar. Concerns about the escalating U.S.-China trade war persist, leading to funds flowing into safe-haven assets.

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.

US Imposes 104% Tariff on China, Trade War Escalates

On April 8, White House Press Secretary Lee Whit announced that due to China's failure to withdraw retaliatory tariffs on US goods, the US will impose an additional 50% tariff on Chinese goods starting at midnight on April 9, Eastern Time, bringing the cumulative tariff rate to 104%. This decision builds on the previously implemented 20% and 34% tariffs, marking a new phase of high-intensity confrontation in the US-China trade war.

China's Ministry of Foreign Affairs responded firmly, stating that the US's actions lack sincerity and that if the US insists on escalating the trade conflict, China will "stand firm." The mutual imposition of high tariffs by both parties has already shaken global markets, with technology and electronic products being the first victims.

Laptop Brands Halt Shipments, US Market Supply Chain Disrupted

On the eve of the tariff policy taking effect, the world's top five laptop brands—Asus, Acer, Lenovo, HP, and Dell—announced on April 9 that they would suspend all shipments of laptops and related components to the US for two weeks. This decision not only affects the supply of end products but also impacts numerous Taiwanese component suppliers, including keyboard manufacturers Chicony, Zippy, and security companies like AVerMedia, all of whom have received notifications from clients to pause shipments or adopt a wait-and-see approach.

According to a report by the Commercial Times, these brands made the decision to observe market reactions and the details of tariff implementation, while also buying time to adjust supply chains and pricing strategies. Analysts point out that if laptop products are subjected to a 104% tariff, it will lead to a price increase of over 30% in the US market, severely undermining product competitiveness.

Taiwanese Electronics Industry Faces Dual Pressure: Chinese Manufacturing and US Tariffs

The Taiwanese electronics industry has long relied on China as a major manufacturing base. According to statistics, the top five electronics companies have 12 factories in China, with Foxconn having 40 factories and 760,000 employees. The high tariffs imposed by the US on Chinese-made goods directly impact the shipping costs and profit margins of these Taiwanese companies.

At the same time, the US has also imposed a 32% "equivalent tariff" on Taiwanese goods, covering industries such as information and communication, electronic components, machinery, and bicycles. According to the Ministry of Economic Affairs, computers and their peripherals account for 58.1% of Taiwan's exports to the US, with computer accessories at 5.5%, indicating that laptops and related products are heavily affected.

Taiwanese Companies' Response Strategies: Diversifying Production and Adjusting Market Strategy

Facing tariff pressure, Taiwanese companies are actively seeking ways to respond. Asus stated that it will actively manage inventory, supply chain configuration, and pricing strategies, prioritizing the shipment of high-end products such as gaming laptops and graphics cards to non-US markets to mitigate risk. Acer emphasized that it will take necessary measures based on market demand and competitive environment and has already announced a 10% price increase for some products.

MSI and Gigabyte had already moved some laptop production back to Taiwan during Trump's first term and have recently set up new factories in India to further diversify production risks. Inventec and Wistron are considering leveraging the USMCA framework to assemble laptops and server products in Mexico before shipping them to the US to avoid high tariffs.

However, companies generally point out that meeting the US's requirement of "20% US manufacturing value" for tariff exemption is extremely difficult in practice. For example, while processors use US technology, they are mostly manufactured by TSMC; memory and hard drives mostly come from Korea; and other components come from China or Southeast Asia, making it hard to meet exemption conditions.

Supply Chain on Hold, Industry Confidence Hit

Currently, some major Taiwanese OEMs like Quanta, Compal, and Pegatron have not yet received notifications to suspend shipments, and shipments are proceeding as usual, but they also admit that the tariff policy is highly variable and requires continuous observation. Inventec noted that second-quarter laptop shipments are still expected to grow, but the impact of tariffs remains a potential risk. Pegatron has opened a new office in California to strengthen its North American market strategy and plans to set up a factory there.

Analysts point out that the Taiwanese electronics industry is caught in the middle of the US-China trade war. Whether it's the obstruction of exports manufactured in China or the high tariffs imposed on Taiwan itself, both have a substantial impact on the industry. In the short term, companies can only respond by adjusting market strategies, diversifying production, and reducing costs, but in the long term, supply chain restructuring and market realignment will become inevitable trends.

References

People Also Ask...

faq

What long-term strategies does Taiwan's electronics industry have in response to the US-China tariff war and restructuring its supply chain?

faq

What specific strategies are Taiwanese electronics companies using to tackle the US-China trade war?

faq

Given the intensity of the US-China tariff war, what specific actions can Taiwan's electronics industry take to lessen the impact?