Taiwan’s industrial sector is under growing pressure after the United States, under former President Donald Trump’s influence, announced a sweeping 32% import tariff on Taiwanese goods. This move, aimed at reshaping global trade dynamics, has triggered concerns across Taiwan’s business community — particularly due to the island’s heavy reliance on exports to both the U.S. and China.
Amid these concerns, Lin Por-fong (林伯豐), Chairman of the Third Wednesday Club — a leading private-sector association of Taiwanese entrepreneurs and business executives — made a series of urgent policy proposals to help buffer the economic shock. His recommendations, made on behalf of the private sector during a high-level forum on Wednesday, target Taiwan’s fiscal and industrial strategy in light of the looming tariff impact.
📉 The Crippling Effect of U.S. Tariffs on Taiwan
Lin warned that the 32% U.S. import duty — widely perceived by Taiwanese business leaders as punitive and protectionist — could lead to:
- A sharp decline in Taiwan’s GDP growth, potentially falling below 1.5% in 2025
- A 21% drop in exports to the U.S., which currently account for 23% of Taiwan’s total outbound shipments
- Widespread industrial stagnation, especially for mid-sized manufacturers and exporters
He emphasized that the government must act swiftly, not just with statements of support but with tangible policy changes and financial assistance.
🛠️ Lin’s Key Policy Recommendations:
- Carbon Fee Suspension until 2027
Businesses should not be burdened with environmental costs during an economic crisis. Postponing the carbon fee gives companies breathing room to invest in sustainability once markets stabilize. - Industrial Utility Security
A guaranteed supply of water and electricity, especially for chipmakers and energy-intensive industries, is critical to avoid production delays and maintain output levels. - Tax and Duty Reforms
Lin called for:- Temporary reductions or exemptions in business income tax, excise tax, and stamp duties
- A reassessment of import tariffs on raw materials and vehicles
- Land rental concessions for companies in industrial parks
- Financing and Loan Support
The government should extend preferential loans, lower interest rates, and credit guarantees for export-oriented businesses, especially SMEs affected by new trade barriers. - Diversify Trade Strategy with China
Despite ongoing political tension, Lin highlighted that over 31% of Taiwan’s exports go to China. Taiwan must depoliticize trade and pursue pragmatic economic engagement to prevent over-dependence on the U.S. market.
💬 Why This Matters: Strategic Economic Sovereignty
Lin’s appeal goes beyond short-term relief — it underscores the strategic need for Taiwan to maintain economic independence and resilience amid geopolitical rivalries.
The semiconductor sector, which plays a central role in U.S.-Taiwan trade, could face cascading supply disruptions. This is especially critical given recent warnings by U.S. Indo-Pacific Commander Admiral Paparo, who pointed to Taiwan’s centrality in global chip supply chains.
With the U.S. also signaling internal resource prioritization and a shift in focus from Ukraine to Taiwan, Taiwan may find itself caught between economic coercion from China and strategic conditionality from the U.S.
❓ FAQs
Why did the U.S. impose a 32% tariff on Taiwan?
The tariffs are part of a broader protectionist strategy influenced by former President Trump, aimed at reducing U.S. dependence on foreign goods and reshoring manufacturing. Taiwan, a major chip exporter, is disproportionately affected.
How might these tariffs impact Taiwan’s economy?
Taiwan’s GDP growth could drop below 1.5%, and exports to the U.S. — which make up 23% of Taiwan’s total exports — could fall by more than 21%, especially in sectors like semiconductors and high-tech manufacturing.
What is the Third Wednesday Club?
It is a non-governmental association of Taiwanese business leaders that meets monthly to discuss national economic and industrial policy. Lin Por-fong is the chairman.
Why suspend the carbon fee until 2027?
Businesses argue that the economic environment is too unstable to absorb additional operational costs. Suspending the carbon fee would provide temporary relief, allowing businesses to focus on recovery.
What alternatives to U.S. trade does Lin suggest?
Lin recommends pragmatic engagement with China, Taiwan’s largest export market, accounting for over 31% of total sales. He also suggests reassessing global trade strategies and improving domestic industrial support.
