The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10.
It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said.
During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries. Against this backdrop, many local manufacturers received rush orders in recent months, but the association said it remains to be seen if the order momentum would continue after Trump takes office.
Photo: CNA
China’s decision to end tariff reductions on Taiwanese machinery under the Economic Cooperation Framework Agreement (ECFA) early harvest list in June last year also contributed to the lower exports to the country, the association said.
Taiwan’s machinery exports comprise mainly inspection and testing equipment, electronic equipment, and machine tools, the association said.
The US and China remained the two largest buyers of Taiwanese machinery products last year, accounting for 24.6 percent and 23.4 percent share of the nation’s total exports respectively, followed by Japan, with purchases totaling US$2.15 billion, or 7.3 percent, it said.
For the whole of last year, machinery exports totaled US$29.28 billion, down 0.6 percent from US$29.44 billion a year earlier, the association’s data showed.
Exports of electronic equipment increased 4 percent year-on-year to US$4.95 billion, and those of inspection and testing equipment rose 3.6 percent to US$4.377 billion, while outbound shipments of machine tools fell 14.8 percent to US$2.22 billion last year, data found.
The association attributed the decline in machine tool exports to geopolitical conflicts, as local manufacturers actively complied with government regulations and conducted customer verifications to avoid their goods becoming production tools for weapons amid the Russia-Ukraine war, which greatly affected their export orders.
Coupled with the sharp depreciation of the yen and the dumping of low-priced goods from China in overseas markets, Taiwan’s machine tool exports continued to drop last year after an annual decrease of 14 percent in 2023, the most affected among Taiwanese machinery, the association said.
However, there is no need to be pessimistic as local machinery manufacturers would see a gradual recovery in orders this year thanks to the growing economies of India, Mexico and Southeast Asia, it said.
Taiwanese exporters must make early preparations for Trump’s trade policies, as high US tariffs and the priority of US manufacturing would be challenges for Taiwan’s exports, the association said.
Even though machinery products might not be directly affected, indirect impacts are inevitable, it added.
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