📉 U.S. Announces Sweeping Tariff Policy: Taiwan Hit with 32% Rate
In a move that has sent shockwaves through global financial markets, former U.S. President Donald Trump introduced a new tariff policy on April 2, 2025, dubbed the “Liberation Day” Tariff. Under this aggressive trade policy, the U.S. will impose:
- A universal 10% tariff on all foreign imports
- An additional 32% tariff specifically targeting Taiwanese exports
This has raised major concerns in Taipei, particularly for key export industries like semiconductors and electronics.
🗣️ Premier Cho Jung-tai: “Prepare for Economic Turbulence”
During a Friday press conference, Taiwan’s Premier Cho Jung-tai warned the public and markets to “brace for turbulence” as the country’s stock market prepares to reopen after a holiday break. He stated:
“We are not standing still. The central bank and the Financial Supervisory Commission are closely monitoring foreign exchange and stock markets.”
He confirmed that the Cabinet is holding emergency talks with industries to strategize responses.
💰 Taiwan Unveils NT$88 Billion Support Package
To buffer the economic blow, Taiwan has announced a NT$88 billion (US$2.7 billion) support plan for affected industries:
- Targeted sectors: Electronics, semiconductors, machinery, steel
- Loan subsidies: Finance Minister Chuang Tsui-yun announced NT$200 billion in low-interest loans for exporters
- Exchange rate protection: Taiwan’s central bank may take action if there is excessive volatility in the Taiwan dollar
💹 Stock Markets React: Global Slump, TSMC Takes a Hit
Financial markets worldwide reacted sharply:
- S&P 500: Dropped 4.8%, its worst day since 2020
- Dow Jones: Fell 1,679 points (4%)
- Nasdaq: Dropped 6%
- TSMC ADRs: Fell more than 7% on the NYSE
Since TSMC (Taiwan Semiconductor Manufacturing Co.) holds the largest weight on Taiwan’s Taiex index (35.67%), its fall signals potential instability when Taiwan’s markets reopen.
🇨🇳 China Responds: Trade War Escalates
China retaliated swiftly by:
- Imposing 34% tariffs on all U.S. imports
- Filing a formal complaint at the World Trade Organization (WTO)
- Urging other countries to oppose “unilateralism” in global trade
This tit-for-tat strategy has fueled fears of a new global trade war, reminiscent of the one during Trump’s previous term.
❓ FAQs
Why is Taiwan facing a 32% U.S. tariff?
The U.S. alleges that Taiwan benefits disproportionately from trade with the U.S. and may be manipulating currency rates, triggering this specific tariff rate under Trump’s “reciprocal” policy.
Which industries in Taiwan are most affected?
The most impacted industries include:
Semiconductors (especially TSMC)
Consumer electronics
Steel and mechanical components
What is the government doing to help?
The Taiwanese government is:
Offering NT$88 billion in direct industry support
Providing NT$200 billion in subsidized loans
Monitoring foreign exchange fluctuations closely
How will Taiwan’s stock market react?
Due to the fall in TSMC’s ADRs and the global sell-off, the Taiwan Stock Exchange (Taiex) may see significant losses when it reopens.
Could this trigger a larger trade war?
Yes. With China retaliating and the EU considering legal action, this could ignite a larger multilateral trade conflict.
