US Imposes Significant Tariffs on Taiwan Threatening Economic Growth and Trade Relations in 2024 Podcast Por arte de portada

US Imposes Significant Tariffs on Taiwan Threatening Economic Growth and Trade Relations in 2024

US Imposes Significant Tariffs on Taiwan Threatening Economic Growth and Trade Relations in 2024

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 Listeners, welcome to Taiwan Tariff News and Tracker. Today’s top story centers on the latest US tariff actions under President Trump’s administration and how these evolving policies shape Taiwan’s trade landscape.

On April 2nd this year, the Trump administration made global headlines by announcing a sweeping 32 percent tariff on almost all imports from Taiwan. The administration justified the move by citing so-called “reciprocal tariffs” aimed at rebalancing what they argue are unfair trade relationships. Notably, Taiwan was excluded from the first rounds of US tariffs earlier in the decade, but its growing trade surplus with the United States – which reached 73.9 billion US dollars in 2024, the sixth largest US deficit globally – has made it a primary target for the new tariff regime.

Following intense negotiations and global market turbulence, including major losses on Taiwan’s stock exchanges, the original 32 percent tariff was paused for 90 days and a 10 percent baseline tariff was imposed on Taiwanese imports. That 10 percent rate is currently in effect, matching the reciprocal tariffs the US has applied to most of its trading partners, except for China and Hong Kong, which face higher rates. This 90-day pause is set to expire on July 9th. If talks break down or no extension is granted, listeners should be prepared for the tariff on Taiwan to snap back to 32 percent, instantly making it one of the highest US tariff rates in the world. According to the American Chamber of Commerce in Taipei, this would place Taiwan among the 30 countries most affected by US trade barriers.

Despite these tough measures, there have been some key carve-outs. Computers, smartphones, and, most importantly for Taiwan, semiconductors – which are the backbone of its export economy – have so far been exempted from these tariffs. Nonetheless, the threat of expanded tariffs on the semiconductor sector remains, keeping Taiwanese businesses and policymakers on edge.

The uncertain environment has cast a shadow over Taiwan’s economic outlook. The Center for Economic Research in Taipei warns that, if tariffs rise even modestly above 10 percent, Taiwan’s 2025 economic growth could fall below 2 percent. Conversely, a full re-imposition of 32 percent tariffs would likely trigger a contraction in manufacturing output and significantly dampen GDP growth, possibly lowering it to near zero if the global economy slows.

There’s also a political dimension: Taiwan’s government has voiced frustration over what it calls “unreasonable” demands from the Trump administration, choosing not to retaliate but instead offering to increase US imports and remove tariffs on American goods. With negotiations ongoing, President Lai and his cabinet are urging industry and parliament to fast-track support measures to cushion the economy.

That’s all for today’s Taiwan Tariff News and Tracker. Thanks for tuning in and don’t forget to subscribe. This has been a quiet please production, for more check out quiet please dot ai.

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