Taiwan is preparing to support companies moving production from China due to potential tariffs expected under U.S. President Trump’s administration. Economy Minister Kuo Jyh-huei acknowledged the substantial impact these tariffs could have, asserting the government’s commitment to assisting Taiwanese firms in relocating operations. Concerns regarding TSMC’s subsidies were discussed, yet confidence in ongoing investments in the U.S. remains strong among Taiwanese chipmakers.
Taiwan is poised to assist companies in relocating their production from China in anticipation of potential tariffs that incoming U.S. President Donald Trump has proposed, according to Economy Minister Kuo Jyh-huei. The likelihood of Trump imposing significant tariffs, particularly a staggering 60% on imports of Chinese goods, threatens the growth of the world’s second-largest economy. For decades, Taiwanese firms have invested heavily in China, capitalizing on lower production costs, but rising concerns over China’s sovereignty claims have prompted the Taiwanese government to encourage these firms to diversify their investments. During a parliamentary discussion, Minister Kuo emphasized that the impact of any tariffs levied against China would be substantial for Taiwanese companies operating within its borders. He declared, “We will as soon as possible come up with help for Taiwan companies to move their production bases,” although specific plans were not disclosed at that time. Kuo also addressed legislative concerns regarding the potential cancellation of subsidies for TSMC, the largest contract chipmaker globally, which is investing $65 billion in new manufacturing facilities in Arizona. He reassured lawmakers that there is a contingency plan in place, aimed at providing further support to companies in the semiconductor supply chain seeking to relocate to the United States. Notably, he remarked that “it is a trend for TSMC to keep expanding its investment in the United States.” The Taipei-listed shares of TSMC witnessed a 1% increment amidst these discussions. Additionally, Taiwan’s GlobalWafers, which is investing $4 billion in the U.S., expressed confidence that the Chips and Science Act, which promotes domestic chip manufacturing, would remain intact under the incoming administration. In a statement, the company asserted, “Multi-year and decadal programs like the CHIPS Act and the agreements we have signed are regularly continued from one administration to the next,” projecting a smooth continuation of the CHIPS program even in the Trump administration.
The article highlights the economic implications of potential new tariffs by the incoming U.S. administration under Donald Trump, particularly focusing on their impact on Taiwanese companies operating in China. The context of these tariffs is rooted in the ongoing trade tensions between the United States and China, which have spurred companies to reevaluate their production strategies. Taiwan’s significant investment in China over the past four decades poses challenges as the Taiwanese government seeks to prompt its firms to diversify, reducing their dependency on the Chinese market. By encouraging relocation, Taiwan aims to bolster its own economic resilience amidst external pressures.
In conclusion, Taiwan’s proactive approach to assist companies in relocating from China in the face of potential U.S. tariffs highlights the complexities of global trade relationships. Economy Minister Kuo Jyh-huei’s reassurances regarding support for Taiwanese firms and the assurance of continued investment in the United States signpost a strategic shift that could mitigate the adverse impacts of impending tariffs. The ongoing confidence expressed by significant players in the semiconductor industry, such as TSMC and GlobalWafers, underscores a resilient outlook for Taiwanese investments, aligning with governmental support for diversification postures.
Original Source: money.usnews.com
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