TAIPEI (Taiwan News) — Agriculture Minister Chen Chun-chi (陳駿季) said Monday that Taiwan Sugar Corp. will use its orchid farm in California as a production base for Taiwanese exporters to help cushion the impact of US tariffs.

The move follows the introduction of a 20% US tariff on Taiwanese imports that took effect Aug. 7, significantly reducing orchid export earnings. Orchids had already faced a 10% tariff since April, resulting in a 15% drop in orders between April and June, per CNA.

The Taiwan Orchid Growers Association said Taiwan’s main rival in the US market, the Netherlands, pays a lower 15% tariff, a gap that has weakened Taiwan’s competitiveness and caused some US buyers to cancel or delay orders. The association urged the agriculture ministry to subsidize equipment purchases for growers and help expand exports to other markets.

Taiwan’s orchids are typically cultivated as seedlings for about 18 months before being exported to the US, where local growers nurture them for another six months until blooming. Taiwan Sugar’s California facility will adopt the same model, the association said.

Establishing a production base in the US will enhance flower quality, raise profits, and reduce losses caused by unstable shipping schedules that often damage seedlings, according to the group.

Taiwan exports about 23 million orchid seedlings to the US annually, over 90% of which are moth orchids. Taiwan Sugar’s California farm can house around 5 million seedlings, the association added.

Chen said the ministry will work with Taiwan Sugar to evaluate possible equipment upgrades, set rental fees for exporters, and determine how seedlings will be transported to the site.

Taiwan Sugar entered the US orchid market in 2000 by acquiring the agricultural division of California-based Rod McLellan. In 2003, it launched a department specializing in moth orchids, building a supply chain that spans breeding, cultivation, and marketing.