The United States is considering waiving tariffs on auto parts, opening up new export opportunities for manufacturers in Taiwan.

Taiwan • Business • 04/25 03:04
The United States is considering waiving tariffs on auto parts, opening up new export opportunities for manufacturers in Taiwan.

The White House confirmed on April 23, 2025, that President Trump is considering granting tariff exemptions on certain auto parts, covering steel and aluminum, imported parts from China, and non-American components of auto parts. This move has attracted attention from the global automotive supply chain, especially from Taiwan's auto parts industry, as it could open up opportunities to enter the U.S. market. Taiwanese businesses and government agencies stated that if the policy is enacted, it would help stabilize shipments, expand market share, and strengthen partnerships with U.S. distributors.

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04/25 03:04

The United States is considering waiving tariffs on auto parts, opening up new export opportunities for manufacturers in Taiwan.

The White House confirmed on April 23, 2025, that President Trump is considering granting tariff exemptions on certain auto parts, covering steel and aluminum, imported parts from China, and non-American components of auto parts. This move has attracted attention from the global automotive supply chain, especially from Taiwan's auto parts industry, as it could open up opportunities to enter the U.S. market. Taiwanese businesses and government agencies stated that if the policy is enacted, it would help stabilize shipments, expand market share, and strengthen partnerships with U.S. distributors.

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Details of the U.S. Tariff Policy Relaxation

According to information confirmed by the White House to CNBC, the Trump Administration is considering exempting certain automotive parts from import tariffs, specifically covering:

  • 25% tariffs on steel and aluminum;
  • A 20% tariff imposed on imports from mainland China due to the fentanyl dispute;
  • A 25% tariff exemption for non-U.S. component automotive parts that meet the conditions of the United States-Mexico-Canada Agreement (USMCA).

Nevertheless, the 25% tariff on complete vehicle imports will remain unchanged. This exemption measure has not yet been formally enacted but has entered the policy discussion stage and is receiving significant attention and lobbying support from the automotive industry.

Potential Gains for Taiwanese Automotive Parts Manufacturers

The Taiwanese automotive parts industry, with its comprehensive supply chain, flexible production capabilities, and international certification advantages, has long maintained a strong presence in the global aftermarket (AM) sector. If the U.S. tariff policy is relaxed, it will reduce cost pressures for Taiwanese manufacturers when exporting to the U.S. market, further solidifying their position in the global supply chain.

Profile of Key Beneficiaries

  • Tong Yang (1319): The world's largest supplier of automotive plastic and sheet metal parts, with a high market share in the AM market, boasting advantages in a wide variety of molds and a complete product line.
  • TYC (1522): A major supplier of AM car lights, has been expanding into the U.S. market since 2019, acquired a Detroit plant in 2023, and plans to start mass production by the end of 2025.
  • Hushan (7736): The world's largest AM supplier of automotive door handles, with products that are hard to substitute.
  • Hota (1536): Primarily OEM, has secured orders from European and Japanese electric vehicle manufacturers and has begun mass production and delivery.

Moreover, companies like Genplus, Hulian, and Hongxu-KY are actively expanding in the North American market, with over a thousand product lines established in the U.S. AM market.

Export and Production Capacity Strategy

Taiwanese shock absorber manufacturer Bor-Chuann noted that it exports 4 to 6 containers to the U.S. monthly, where distributors previously absorbed the tariffs. If future tariffs are further adjusted, it will help reduce channel pressure and stabilize shipping schedules. The company emphasized that all products are designed and manufactured in Taiwan, establishing market trust with Made in Taiwan quality.

TYC stated that the concentration of the automotive industry chain in the Detroit area facilitates the acquisition of raw materials and equipment, reducing transportation costs and enhancing price competitiveness.

Industry and Government Responses

Taiwanese automotive parts manufacturers generally express that if U.S. tariff policies are relaxed, it will help resume long-term order deliveries and stabilize the supply chain. Manufacturers noted that in the past, high tariffs prevented shipments from mainland China, providing Taiwanese manufacturers with order transfer opportunities. Even if Chinese manufacturers receive exemptions in the future, Taiwanese products will still have competitive advantages in quality and delivery time.

The Bureau of Foreign Trade under the Ministry of Economic Affairs is also actively promoting export matchmaking, hosting the "Taiwan Select Global Procurement Summit" on April 23, attracting 454 international buyers from 48 countries to Taiwan for negotiations, covering industries such as automotive parts and electric vehicles, with business opportunities expected to reach $800 million. The Bureau of Foreign Trade stated that it will continue to hold procurement events in Taichung and Kaohsiung to strengthen the international connections of Taiwan's automotive parts industry.

U.S. Market Dynamics and Opportunities for Taiwan

The U.S. automotive aftermarket sector is entering a new growth cycle. Due to rising new car prices and a high-interest rate environment, consumers are extending the lifespan of their vehicles, driving up DIY and repair demand. U.S. retailers like O'Reilly Automotive are also adjusting procurement strategies in response to tariff pressures, actively seeking alternative suppliers outside of China and Mexico.

Taiwanese manufacturers have comprehensive OEM capabilities, covering areas such as mechanical components, suspension systems, brake parts, and electronic modules, and can establish direct supply or OEM/ODM cooperation models with U.S. distributors like O'Reilly, increasing value-added opportunities.

References

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