TAIPEI (Taiwan News) — Economics Minister Kuo Jyh-huei (郭智輝) said Monday the ministry has launched programs to help Taiwan’s auto parts manufacturers cope with the US imposing a 25% tariff on their exports.

Kuo met with major domestic auto parts manufacturers and aftermarket exporters to discuss industry challenges, including US tariff policies and New Taiwan dollar exchange rate fluctuations, per CNA.

The ministry’s measures include helping businesses integrate AI technology to improve production efficiency and offering a replacement program to encourage purchases of high-efficiency, energy-saving equipment.

Kuo said the ministry will also assist companies in jointly procuring raw materials to increase bargaining power and coordinate with China Steel Corp. to lower prices, with savings passed on to downstream manufacturers.

Additional support includes subsidies for corporate R&D to promote industry transformation and cooperation with the Ministry of Finance to amend the commodity tax policy. The aim is to speed up the retirement of older vehicles and stimulate domestic demand.

To help small and medium-sized enterprises manage exchange rate risks, the ministry will promote credit guarantee measures to make it easier to access financial tools for currency hedging.

Taiwan has around 1,741 auto parts manufacturers, with exports exceeding NT$220 billion (US$6.8 billion) annually over the past three years. The US accounts for about 50% of those exports, making it a critical market.

Manufacturers said they also face rising electricity prices, exchange rate volatility, higher raw material costs, and weak domestic demand, stressing that stabilizing electricity prices and the exchange rate should be top priorities.

Kuo pledged the government will continue negotiating with the US to lower tariff rates on Taiwanese goods and will keep offering subsidies to support industry transformation and expand the domestic market.