KMT Proposes NT$10,000 Cash Handouts to Cushion U.S. Tariff Impact on Taiwan’s Economy

Taiwan’s main opposition party, the Kuomintang (KMT), has proposed a major economic relief bill aimed at mitigating the effects of recently announced U.S. tariffs. The headline measure: NT$10,000 (US$330) in cash handouts to all Taiwanese citizens, potentially boosting domestic consumption amid growing economic uncertainty.

🧾 Key Proposal Highlights

At a press conference in Taipei, KMT lawmakers introduced a NT$390 billion (US$12.94 billion) relief package to help buffer Taiwan’s economy from the impact of punitive U.S. tariffs. The proposed bill covers:

• NT$230 billion for cash handouts (NT$10,000 per citizen by October).
• Support for Taiwan’s industrial and agricultural sectors.
• Strategic economic stimulation without bailing out Taipower, the heavily indebted national utility.

This bill stands in contrast to the Cabinet’s NT$410 billion package, which includes:

• NT$100 billion for Taipower subsidies.
• NT$150 billion for national security initiatives.
• NT$93 billion for general economic support.

💰 Why Cash Handouts?

KMT Legislator Wang Hung-wei (王鴻薇) argued that cash relief is the fastest way to inject liquidity into the economy and stimulate consumption.

“Taiwanese families are bracing for higher prices and economic instability. Cash handouts are not just symbolic; they are practical,” said Wang.

This populist approach echoes previous relief strategies during COVID-19, which successfully boosted short-term consumption and retail activity.

However, critics—including Premier Cho Jung-tai (卓榮泰)—cautioned against blanket handouts, calling them “not the most effective” solution.

🧨 Tariffs and the Trump Factor

The bill comes in direct response to former U.S. President Donald Trump’s tariff announcement in April 2025, where he declared a 32% “reciprocal tariff” on most Taiwanese imports.

Although the tariff was suspended for 90 days and replaced by a more moderate 10% levy, the damage to Taiwan’s economic outlook had already been felt, especially in export-driven sectors like electronics, machinery, and agriculture.

⚡ Energy Debate: The Taipower Divide

A notable divergence between the Cabinet and KMT plans lies in support for Taiwan Power Co. (Taipower).

• The Cabinet proposes NT$100 billion to bail out the loss-making utility.
• KMT rejects this, calling instead for energy policy reform, citing Taipower’s NT$420 billion deficit accumulated by end-2024.

KMT’s Ko Chih-en (柯志恩) slammed the DPP government for mismanaging the energy transition while injecting public funds year after year with no sustainable reform plan in place.

🧭 Political Calculations

The KMT’s cash handout plan is politically savvy. With upcoming local elections and mounting dissatisfaction over economic hardships, the KMT appears to be:

• Positioning itself as the party of the people, delivering tangible relief.
• Distancing itself from Taipower bailouts, which some voters view as corporate welfare.
• Undermining the DPP’s energy transition narrative, where renewable policies haven’t curbed Taipower’s losses.

The Taiwan People’s Party (TPP), meanwhile, seeks middle ground with a NT$6,000 handout proposal—less generous, but still populist—and no Taipower subsidies.

🌏 Bigger Picture: Taiwan’s Economic Resilience

As U.S.-Taiwan trade tensions flare, Taiwan faces a tough balancing act:

• Protect exports without appearing submissive to U.S. pressure.
• Cushion domestic sectors without inflating the fiscal deficit.
• Transition to clean energy while managing aging infrastructure.

Taiwan has already committed to subsidizing affected industries, but it must now consider broader structural reforms, including:

• Diversifying export markets beyond the U.S.
• Modernizing Taipower’s grid and reducing fossil fuel dependence.
• Enhancing domestic consumption as a buffer to external shocks.

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