The Ministry of Economic Affairs on Saturday said it would provide NT$18 billion (US$576.87 million) in aid to help petrochemical exporters after China suspended preferential tariffs established under the Economic Cooperation Framework Agreement signed in 2010.
The ministry decided to offer the assistance after Minister of Economic Affairs Wang Mei-hua (王美花) met with about 50 representatives from the local petrochemical industry a day earlier, a ministry source said.
On Thursday last week, the Chinese Customs Tariff Commission announced that it was suspending preferential tariffs for 12 petrochemical products, including propylene and paraxylene, citing trade barriers imposed by Taiwan on similar products.
Photo: CNA
The government has described the move as a politically motivated attempt to pressure Taiwan ahead of the Jan. 13 presidential and legislative elections.
The ministry is to assign NT$6 billion from the Industrial Development Bureau to help petrochemical firms produce value-added products and an additional NT$2 billion from the International Trade Administration to explore foreign markets, the source said.
The ministry is also to allocate NT$10 billion from its special budget to aid industries in the post-COVID-19 pandemic era to make up the rest of the NT$18 billion, they said.
The source said the suspension of preferential tariffs was unlikely to have an immediate material impact on the local petrochemical industry.
However, the effects of the reinstated tariffs are likely to be felt up and down the supply chain in the long run, because much of the local petrochemical industry consists of joint products — those generated within a single production process, the source said.
Taiwanese petrochemical exporters selling products to China have to shoulder tariffs of 1 to 6.5 percent, the ministry said.
Wang on Friday told reporters that Taiwan’s exports of petrochemical products to China totaled about US$1.8 billion in the first 11 months of this year.
This was just a small fraction of the country’s total exports of US$392.56 billion during the same period.
Some of the industrial representatives attending the meeting with Wang said they were concerned about the effects of Beijing’s intensified efforts to expand petrochemical production and exports amid an economic slowdown in China.
However, other representatives said that many petrochemical exporters had started diversifying markets from China to other markets, such as Southeast Asian countries, India, the US and Europe.
During the meeting, Wang said that the government would accelerate help for the local petrochemical industry to find its market niche.
Wang added that the government would also help Taiwanese firms roll out differential products from those made by their foreign counterparts, while continuing to push for intelligent, low-carbon production to boost global competitiveness.
The ministry would put more effort into assisting local petrochemical exporters in exploring foreign markets by holding economic forums, which would allow them to meet foreign buyers and seek business opportunities.
In addition, the ministry would work with Taiwan’s representative offices, the government-sponsored Taiwan External Trade Development Council and industrial associations to send delegates overseas to promote Taiwan-made petrochemical items.
While many exporters in the petrochemical industry have seen no immediate impact from China’s actions, Yueh Chun-hao (岳俊豪), a section chief of the government-funded Industrial Technology Research Institute (工研院), expressed concerns that Beijing would also suspend preferential tariffs for Taiwanese machine tools and automotive parts, hitting small and medium-sized enterprises.
Through last month, China accounted for about 35 percent of Taiwan’s total exports this year, down from 40 percent in recent years, the ministry said.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his