President Lai Ching-te has called a new 32% tariff by the United States on most Taiwanese goods “unreasonable,” warning that the move could hurt Taiwan’s economy. Semiconductors, Taiwan’s biggest export to the U.S., are exempt for now, but concerns remain as President Donald Trump signals more chip-specific tariffs may follow.
Category
🗞
NewsTranscript
00:00President Lai says a 32% tariff imposed by the U.S. on most Taiwanese products is unreasonable.
00:06Semiconductors, Taiwan's largest export to the U.S., have been exempted,
00:11but there are still deep concerns that the tariffs will cause economic pain for Taiwan.
00:16Chris Goren is in the newsroom here in Taipei with more. Chris, how is Taiwan responding?
00:21Well, Tiffany, today is a national holiday, so the response is a bit more muted than it
00:30might normally be. The cabinet is going to have a press conference later this afternoon on tariffs,
00:37but as you mentioned, President Lai Ching-da also released a statement on his Facebook page
00:41last night saying that tariffs based on the trade deficit do not reasonably reflect the
00:47highly complementary and substantive trade relationship between Taiwan and the United
00:51States, and that regarding the many unreasonable aspects of the tariffs, he's instructed the
00:56cabinet to continue to negotiate vigorously with the U.S. and safeguard the interests of Taiwan.
01:02Now, a 32% tariff on most products will certainly have an effect here, but it's important to note
01:08that the semiconductors were actually exempt from these tariffs, and that's especially important in
01:13Taiwan, where the semiconductor industry accounts for 60% of all export value. Now, it's important
01:21also to point out, though, that most Taiwanese chips that end up in the United States don't end
01:25up there as standalone products. Rather, they're often found inside finished products like computers
01:32and AI servers that are assembled in Taiwan, and it's these completed products that actually make
01:37up a much larger portion of Taiwan's exports to the United States, and it's unclear if these
01:43tariffs will apply to those finished products. And also, Trump also said that specific tariffs
01:52on chips themselves are coming, so to learn more about what the White House's motivations were for
01:58the tariffs and how it might affect the tech industry, I spoke with Dave Nicholson of Futurum
02:03Group, and I began by asking him how the tariffs might specifically affect Taiwan's industry.
02:10There's going to be a lot of negotiation involved, and specifically when you look at
02:15how critical Taiwan is in the semiconductor manufacturer world, there's no chance that
02:2334%, 32%, whatever the number is, is going to be levied against everything TSMC does as an example.
02:30If you need something, you will pay the additional fees. Someone will. To the extent
02:37that there are perfect substitutes that are less expensive, there will be a movement to those
02:42substitutes. In the case of what TSMC builds and delivers to the market, there aren't substitutes.
02:47They dominate the space, especially in certain scale of technology.
02:54Well, we know that a big goal of the Trump administration with these tariffs is to bring
02:58high-tech manufacturing back to the United States. Recently, in a TV interview, the U.S.
03:03Secretary of Commerce, Howard Lutnick, said that there's nothing about Taiwan that they should be
03:08making semiconductors. How would you respond to that? I would say, with a heavy dose of sarcasm,
03:14I would say, he is absolutely correct. There is no reason at all, except for the incredible amount
03:22of expertise required. It's absurd. This stuff doesn't happen overnight. It's years and years
03:30and years to get to the point where other manufacturers can do what TSMC does. TSMC has
03:37earned that spot. To say there is no reason why chips need to be manufactured in Taiwan, sure,
03:44right. You could, in theory, do these things in other places that have access to
03:49humans, water and power. But that belies a lack of understanding of the complexity that's involved.
04:00Now, as Nicholson pointed out, the 32% tariffs won't take effect until April 9th,
04:05and there's sure to be a lot of negotiations until then. And it's at that point, Tiffany,
04:11that we'll have a better understanding of exactly how Taiwan's industries will be affected.