Analyst: Taiwan Needs To Prepare for Tariffs Under Trump 2.0

TaiwanPlus News

As uncertainty and talk of tariffs under President-elect Trump creates anxiety among the global economy, TaiwanPlus talks with economist Daniel Liu of the Chung-Hua Institute of Economic Research to find out what Taiwan needs to prepare for.

Transcript

00:00The word uncertain has been used to describe a lot of Trump's proposed economic policies.

00:06What might be some of his economic policies in the first year?

00:09My answer would be, as we know, Trump is, you know, the firm believers in tariff.

00:16As a result, you know, during his campaign, he mentioned many times, you know, he will

00:22use the tariff, you know, to counter the negative impact on the U.S.

00:27As a result, I think the major difference between Trump and Biden is that Biden major

00:31imposed tariff on mainland China.

00:33However, during the campaign, you know, Trump mentioned about he will apply the tariff,

00:38you know, not only on mainland China, but also on the, you know, he will set up with

00:42so-called universal tariff that will impose on all the U.S. imports.

00:47Of course, that will include Taiwan and other countries.

00:50In particular, he will also, you know, emphasize on, you know, to prohibit, you know, the

00:54electric vehicles export to the U.S. from Mexico.

00:58So he will also target a very high tariff on the Mexico product.

01:02So that will create very, very significant uncertainty, you know, around the world.

01:06Because tariff is we so-called the old-fashioned, it's an old trade policy tool that was used

01:12in last century.

01:14So if Trump does apply these tariffs to China and a universal tariff to many other nations,

01:21what might be the downstream effect for Taiwan?

01:23After the U.S.-China trade war, we can see a very significant change in the Taiwanese

01:28export structure, which means, you know, we are export to mainland China declines significantly.

01:33Instead, our export to the U.S., you know, increase.

01:36I can give you some new figures.

01:38According to the first nine months of this year, our export to the U.S. already account

01:43one quarter of our Taiwanese total exports.

01:46U.S. is already Taiwan's second largest export market.

01:48As a result, if Trump, you know, impose a universal tariff on the world, you know, that

01:54will, of course, you know, you know, slow down our export momentum.

01:59So what it might be a quite turbulent economy.

02:03What are the opportunities and challenges for Taiwan?

02:07At first, I will say what is the challenge, as in not only for Taiwan, also for the other

02:10East Asian countries.

02:11You know, the first one is Biden's policy is we so-called made by U.S.

02:17Which means, you know, you have to move out of from China to set up factories, you know,

02:22in East Asia, in Taiwan, in Mexico.

02:25That is acceptable by the administration.

02:27However, Trump is very, very upset about, you know, the firms, the factories not set

02:32up in the U.S.

02:33So he will change Biden's mindset from made by the U.S. to the made in the U.S., which

02:39means in order to, you know, to not to occur the retaliation from the U.S., maybe Taiwanese

02:45firm may have to invest in the U.S.

02:48Not only the TSMC, we can see the future, many other Taiwanese firms in order to afford

02:54the U.S., you know, the high tariff or the retaliation, they have to invest in the U.S.

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