Taiwan tackles Donald Trump's tariffs threat

DW (English)

Taiwan's economy performed well last year thanks to a resilient export industry and an increase in flexibility caused by the US-China trade frictions. But the specter of US President Donald Trump's tariffs hangs over the island.

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00:00Taiwanese love their soup-filled dumplings.

00:04The popularity of the Din Tai Fung restaurant chain in downtown Taipei

00:08is a fine culinary example of how Taiwan's economy is growing strongly.

00:12Taiwan saw strong economic growth of 4.3% in 2024.

00:17The self-ruled island outperformed Singapore, Hong Kong and South Korea,

00:22despite the threat of military action by China which hangs over the island.

00:26The bedrock of Taiwan's economic success is its computer chip industry.

00:31Chip production accounts for around a quarter of the self-ruled island's economy.

00:36But US President Donald Trump has threatened to impose 100% tariffs

00:40on Taiwanese-made semiconductors.

00:43The tariff is aimed at forcing microchip production back to the US.

00:48The biggest player is TSMC, which makes nearly two-thirds of the world's microchips.

00:54TSMC is worth more than a trillion dollars.

00:57The manufacturer could increase microchip prices by 15%

01:01to offset the effects of tariffs.

01:05The Taiwanese government has indicated that it will support companies

01:08that plan to relocate to the United States,

01:11including helping them find partners.

01:16Some analysts believe the efficiency of Taiwanese companies

01:19will help them offset the impact of tariffs.

01:22Taiwan will definitely benefit in many areas because outside of China,

01:27if tariffs are put up, then the Taiwanese companies like Foxconn,

01:31like Delta Electronics, like Quanta, like many other Taiwanese companies

01:34have global supply chains and they're very nimble.

01:37They can move overseas very quickly.

01:39They can shift their supply chains quicker than most other companies can do.

01:44Some have already started moving.

01:46TSMC has begun producing advanced chips at its manufacturing plant in Arizona.

01:52Ray Yang, who works in chip strategy for the Taiwanese government,

01:55believes that Taiwan's strength in generative artificial intelligence, or GAI,

01:59will boost its relationship with the U.S.

02:04The Taiwan, the whole Taiwan semiconductor industry,

02:07we shall collaborate closely with Americans,

02:16not only the corporations but also research institutes, academics,

02:21to try to bring their innovative GAI solution

02:27to make the future semiconductor industry,

02:32the whole supply chain, to be more efficient.

02:37Taiwan's links to the U.S. are more than economic.

02:40It also has a security partnership.

02:42Beijing regularly threatens to take the island by force.

02:45Taiwan relies on the U.S. for protection

02:47and needs to keep its relations with the U.S. friendly.

02:52Dintai Feng's overseas business is booming.

02:55170 locations across more than 10 countries and regions worldwide.

03:01It even opened its flagship store in Donald Trump's home city of New York in 2022.

03:06Taiwan hopes its economy can beat the tariffs and stay on a roll.

03:15For more UN videos visit www.un.org

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