Taiwan’s government and businesses should brace for potentially tougher trade hurdles if former US president Donald Trump is re-elected, as he aims to target China and other countries with new or higher tariffs to restore the US economy to its former glory.
Trump remains the front-runner in the US presidential election, although his lead in approval ratings has significantly narrowed after US President Joe Biden dropped his re-election bid and endorsed US Vice President Kamala Harris over the weekend. In a potential showdown between Harris and Trump, they were nearly tied, with 42 percent supporting her and 43 percent supporting him, ABC News reported, citing an Ipsos poll released earlier this month.
Trump believes robust tariffs are a key factor in making the US economy great again, although the idea is not supported by a majority of economists. He might slap new tariffs of anywhere from 60 to 100 percent on China, Bloomberg reported. He also plans to levy a 10 percent across-the-board tariff on imports from other countries, citing a familiar litany of complaints about foreign countries not buying enough US goods, it said.
Taiwan might not benefit from a new US administration under Trump, and could face new tariffs on technology products and other items. Trump claimed that Taiwan “took our chip business from us,” during a recent interview with Bloomberg Business. “They took all of our chip business. They’re immensely wealthy,” he said. Taiwan plays a key role in supplying the world with semiconductors because of how it evolved in the global semiconductor supply chain through pragmatic collaborations. It manufactures chips designed mostly by US semiconductor companies such as Nvidia, Advanced Micro Devices and Apple. Over the past three decades, Taiwan has invested immensely in fostering its semiconductor industry, making it a hub for chip manufacturing, especially as an artificial intelligence (AI) chip production center. Taiwan this year has about a 48 percent share of the world’s foundry market by capacity, but a large portion of that capacity is reserved for leading-edge technologies from Taiwan Semiconductor Manufacturing Co (TSMC), International Data Corp (IDC) said. The figure is expected to drop to 43 percent by 2028, as capacity buildup in other regions such the US, Japan and Southeast Asia would outstrip Taiwan, IDC said.
Asked about how to mitigate geopolitical risks from the US election, TSMC chairman and CEO C.C. Wei (魏哲家) told investors that the company would not “change our original plan of expanding our overseas fabs. We continue to expand in Arizona, Kumamoto and maybe Germany in the future.” TSMC said that normally, if there are import tariffs, its customers would be responsible for it.
However, TSMC did make a major move to redefine the foundry market. Based on its new “Foundry 2.0” plan, the global foundry market would include packaging, testing, mask-making and all integrated device manufacturing firms, excluding memory manufacturers. That would boost the foundry market to US$250 billion last year from US$150 billion, TSMC said. The firm’s market share would drop dramatically to 28 percent from 60 percent. Some analysts consider the action a way to avert potential probes about anti-competitive practices, which some tech giants have faced.
Trump did not provide details about his semiconductor industry policy, but his comments on Taiwan’s chip industry resulted in TSMC’s stock price taking a dive, dragging the TAIEX down. TSMC shares dipped for a fourth consecutive session to NT$939 yesterday. About NT$2.49 trillion in TSMC’s market capitalization has evaporated over the past four trading sessions.
As Trump seeks re-election, his comments might primarily be aimed at voters, but they could cause a stir among the public and affect the US’ policy toward Taiwan, in turn, hampering the development of Taiwan’s semiconductor industry.
Taiwan’s government and companies should be well prepared to face potential trade challenges.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
In an article published on this page on Tuesday, Kaohsiung-based journalist Julien Oeuillet wrote that “legions of people worldwide would care if a disaster occurred in South Korea or Japan, but the same people would not bat an eyelid if Taiwan disappeared.” That is quite a statement. We are constantly reading about the importance of Taiwan Semiconductor Manufacturing Co (TSMC), hailed in Taiwan as the nation’s “silicon shield” protecting it from hostile foreign forces such as the Chinese Communist Party (CCP), and so crucial to the global supply chain for semiconductors that its loss would cost the global economy US$1
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
Sasha B. Chhabra’s column (“Michelle Yeoh should no longer be welcome,” March 26, page 8) lamented an Instagram post by renowned actress Michelle Yeoh (楊紫瓊) about her recent visit to “Taipei, China.” It is Chhabra’s opinion that, in response to parroting Beijing’s propaganda about the status of Taiwan, Yeoh should be banned from entering this nation and her films cut off from funding by government-backed agencies, as well as disqualified from competing in the Golden Horse Awards. She and other celebrities, he wrote, must be made to understand “that there are consequences for their actions if they become political pawns of
RSS