Trump's Tariff Policies Spark Global Economic Shockwaves: U.S. Retirement Funds Suffer a $169 Billion Loss, European Central Bank Gears Up, Taiwan-U.S. Tariff Talks Kick Off

Taiwan • Business • 04/11 14:09
Trump's Tariff Policies Spark Global Economic Shockwaves: U.S. Retirement Funds Suffer a $169 Billion Loss, European Central Bank Gears Up, Taiwan-U.S. Tariff Talks Kick Off

On April 2, President Donald Trump announced the implementation of a "reciprocal tariff policy" on 180 countries worldwide, resulting in a $169 billion loss for the top 25 state and local retirement funds in the U.S. within four trading days. The European Central Bank is preparing to tackle financial instability, and the EU forecasts that if the tariffs continue, the U.S. GDP will decrease by 3.3% before 2027. The U.S. has begun tariff negotiations with countries, including Taiwan and Israel. Taiwan is facing a 32% tariff impact and has proposed an industry support plan valued at 8.8 billion New Taiwan dollars.

Key Updates

04/11 22:39

U.S.-China Trade War Heats Up: Trump Announces 90-Day Tariff Delay, Causing Volatility in Taiwan and U.S. Stock Markets

On April 9, President Trump of the United States announced a 90-day suspension of high tariffs for most trade partners, imposing only a 10% baseline tariff. However, tariffs on Chinese goods were raised to 145%, escalating tensions in the U.S.-China trade war. This move caused turmoil in global financial markets, leading to significant drops in both U.S. and Taiwanese stock markets. Officials from the Federal Reserve pledged to stabilize the markets, and the House of Representatives passed a budget resolution paving the way for extending tax cuts, which raised concerns about fiscal stability. The Taiwanese government launched an 88 billion NT export support plan to address potential threats.

04/11 19:36

2025 U.S. Tariff Surge: Small and Medium-sized Businesses Feeling the Strain, Graduates Confronting Challenges

In April 2025, President Trump of the United States imposed a 145% tariff increase on Chinese goods and maintained a 10% tariff on goods from most trade partners, causing global market fluctuations, a decline in U.S. stock markets, and a spike in gold prices. Import costs for U.S. small and medium-sized businesses rose, intensifying supply chain pressures. However, experts believe a repeat of the 2008 financial crisis is unlikely in the near term. Recent graduates, facing an uncertain job market, demonstrate readiness and adaptability, actively tackling challenges.

04/11 18:08

The 2025 Trump Tariff Policy Initiates a Global Trade War: the Global Economy and Markets Severely Impacted

In April 2025, the global tariff policy of U.S. President Trump triggered a full-scale trade war, significantly impacting the global economy, financial markets, business operations, and consumers' lives. The U.S. and China imposed high tariffs on one another, and the EU, along with other countries, took retaliatory measures, resulting in business shutdowns, stock market volatility, and increased demand for precious metals. This policy reshaped the global economic and trade order and triggered international negotiations and created policy uncertainty.

04/11 16:39

Taiwan Semiconductor Manufacturing Company and Gigabyte Technology expand their operations in the US to counter the US tariff challenges, while Vanguard International Semiconductor Corporation remains focused on the Asian market.

Taiwanese semiconductor and electronics companies are adjusting their global strategies in response to potential high reciprocal duties from the United States. TSMC and Gigabyte have set up plants in the U.S. to strengthen local production; UMC is rumored to be a target for acquisition, attracting attention; Vanguard International Semiconductor has declined to establish a plant in the U.S. and is instead expanding in Singapore. These actions demonstrate the varied strategies of Taiwanese companies in navigating tariff uncertainties.

04/11 16:39

Escalation of the US-China Trade War: Taiwan's Electronics and Semiconductor Industries Benefit from the 145% US Tariff on Chinese Goods, Resulting in a Surge of Urgent Orders

On April 9, 2025, President Trump of the United States announced a 145% tariff on Chinese imports, while postponing high tariffs on other countries for 90 days. This decision caused turmoil in global markets, benefiting Taiwan's electronics and semiconductor sectors as urgent orders from the U.S. surged. The Taiwanese government swiftly responded by starting tariff negotiations with the U.S. and emphasized strengthening regulations to prevent "country of origin" fraud, to ensure the industry's long-term development.

04/11 14:09

Trump's Tariff Policies Spark Global Economic Shockwaves: U.S. Retirement Funds Suffer a $169 Billion Loss, European Central Bank Gears Up, Taiwan-U.S. Tariff Talks Kick Off

On April 2, President Donald Trump announced the implementation of a "reciprocal tariff policy" on 180 countries worldwide, resulting in a $169 billion loss for the top 25 state and local retirement funds in the U.S. within four trading days. The European Central Bank is preparing to tackle financial instability, and the EU forecasts that if the tariffs continue, the U.S. GDP will decrease by 3.3% before 2027. The U.S. has begun tariff negotiations with countries, including Taiwan and Israel. Taiwan is facing a 32% tariff impact and has proposed an industry support plan valued at 8.8 billion New Taiwan dollars.

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.

Major Losses for US Retirement Funds

According to a report by the nonprofit Equable Institute, following Trump's announcement of global tariff measures on April 2, the top 25 state and local retirement funds in the US suffered approximately $169 billion in paper losses over the four trading days from April 3 to 8 due to severe stock market volatility. The institute noted that these losses primarily stemmed from the decline in valuations of public stock assets and warned that if tariff policies lead to an economic recession, retirement funds could face cash flow constraints in the coming years.

Equable Institute stated that the total losses for these funds could be "significantly higher" and pointed out that such market turbulence is one of the scenarios most concerning for vulnerable retirement funds. As of now, the total losses for these funds since 2015 have reached $249 billion.

ECB and EU's Preparedness

In response to the global economic uncertainty brought about by US tariff policies, European Central Bank President Christine Lagarde stated after a meeting with Eurozone finance ministers in Warsaw that if US tariff actions threaten financial stability, the ECB is "ready to use existing tools" to maintain market stability. Although the Eurozone financial markets are currently functioning well, the ECB has shelved its planned rate hold, and the market widely expects a further 25 basis point rate cut at the April meeting.

EU Economic Affairs Commissioner Valdis Dombrovskis noted after the Eurogroup meeting that according to the latest model simulations, if the current tariff policies persist, US GDP will decrease by 0.8% to 1.4% by 2027; if tariffs become permanent or trigger retaliatory measures, losses could expand to 3.1% to 3.3%. EU GDP is expected to decline by 0.5% to 0.6%, global GDP will decrease by 1.2%, and the total volume of global trade will fall by 7.7% within three years.

Taiwan Faces 32% Tariff Pressure, Initiates Negotiations and Support Plans

Taiwan is one of the countries most affected by the "reciprocal tariffs" policy announced by the Trump administration, facing import tariffs as high as 32%. Although the US announced on April 9 a 90-day suspension of high tariffs for over 75 countries and temporarily reduced the rate to 10%, the Taiwanese government still considers this a "high-risk" scenario and has swiftly initiated response measures.

Premier Su Tseng-chang stated that the government has proposed an industry support plan totaling NT$88 billion (approximately $2.72 billion), covering affected industries such as machinery, electronics, and agricultural and fishery products. According to preliminary estimates by the Chung-Hua Institution for Economic Research, if the 32% tariff is officially implemented, Taiwan's exports of industrial products to the US will decrease by 26%, the overall export value will drop by at least 21%, and manufacturing output is expected to decline by 5%, potentially affecting 125,000 jobs.

President Lai Ching-te stated that Taiwan has been listed among the first countries to begin tariff negotiations with the US and has proposed "zero tariffs" as the basis for negotiations, pledging to increase procurement and investment in the US. Foreign Minister Joseph Wu noted that communication between the two sides is smooth, and they hope to reach a consensus within 90 days.

US Begins Negotiations with Israel and Taiwan

US Trade Representative Jamieson Greer stated on April 11 that tariff negotiations will begin with representatives from Taiwan and Israel. He emphasized that the US needs to diversify its import sources to reduce reliance on China. The negotiations cover as many as 70 countries, indicating a comprehensive restructuring of US global trade policy.

Taiwan noted that although semiconductor products were not included in the current tariff list, other ICT products, agricultural and fishery products, and machinery equipment are still affected. President Lai Ching-te emphasized that Taiwan will discuss issues with the US, including origin labeling, non-tariff barriers, and technology export controls, and prevent Chinese products from entering the US market through Taiwan as an "origin country."

EU Stands Firm, Prepares Retaliatory Tariffs

European Commission President Ursula von der Leyen stated that if the US does not withdraw tariffs on Europe, the EU will not rule out imposing retaliatory tariffs on US tech companies. She emphasized that the EU is ready to use the most powerful trade tools and noted that Europe will not make concessions in negotiations.

The EU has currently proposed a "zero-for-zero" industrial tariff proposal and continues to engage in consultations with the US. European officials noted that if negotiations break down, the EU will take countermeasures against the US digital platform and automotive industries.

References

People Also Ask...

faq

What will Trump's tariffs mean for the global economy in the long run?

faq

In what specific ways will the Taiwanese government's industrial support program assist local businesses that have been impacted?

faq

What is the government's specific action plan in response to the 32% tariff pressure Taiwan is facing?