TAIPEI (Taiwan News) — US President Donald Trump’s imposition of a 25% tariff on goods imported from Canada and Mexico and a 10% tariff on Chinese goods will soon affect Taiwan and its domestic chip production.
Chung-Hua Institution for Economic Research (CIER) President Lien Hsien-ming (連賢明) said that since US allies such as Canada are being taxed, Taiwan should not assume it will be excluded and should prepare for a possible trade war.
Lien described Trump’s trade war as a “global nightmare” and worse than CIER’s initial projections, which had anticipated tariffs only on countries engaged in unfair trade practices or a more gradual rollout targeting specific goods and services, per UDN.
He noted that Trump's decision to impose tariffs on Canada and Mexico in February indicates that no country will be spared. Taiwan could see tariffs on its semiconductor industry as early as mid-February.
Lien warned that Trump is unlikely to stop at the semiconductor industry and could impose tariffs on all Taiwanese exports to the US, with a minimum rate of 10%. The impact on the electronics sector remains uncertain, but the repercussions could escalate into a global trade war.
To respond, Lien said Taiwan, as one of the top 10 countries with a trade surplus with the US, should prioritize reducing that surplus. One approach could be allowing the New Taiwan dollar (NT$) to appreciate, which may have limited impact on the AI industry but could weaken the competitiveness of traditional industries.
Many Taiwanese companies have already shifted supply chains from China to Mexico and Southeast Asia, but now they may need to consider relocating operations to the US, Lien said. He also pointed out that Trump’s tariff on China is lower than that on Canada and Mexico, potentially intensifying competition between Taiwan and China.
Regarding Taiwan’s semiconductor industry, Lien believes high-end chipmaking will be less affected, while mature process nodes may face pricing pressures. He said the potential restructuring of the global semiconductor supply chain due to tariff policies is an issue Taiwan must closely monitor.
