TAIPEI (TVBS News) — Uncertainty surrounding the duration of U.S. President Donald Trump's recently imposed tariffs has created significant challenges for economic forecasting, according to the president of the Chung-Hua Institution for Economic Research (CIER, 中華經濟研院), Taiwan's leading economic think tank. Speaking on Friday (April 18), the institution outlined three distinct growth scenarios for Taiwan's economy: a pessimistic projection of just 0.16%, a general expectation of 1.66%, and an optimistic forecast of 2.85%.
The new projections represent a substantial downward revision from January, when CIER had forecast a 3.22% growth rate for 2025, a figure already tempered by high comparison baselines and mounting global economic uncertainties. CIER President Lien Hsien-ming (連賢明) identified the Trump administration's April 9 tariff implementation as the primary destabilizing factor, though he noted that a 90-day buffer period and exemptions for certain technology products could mitigate some impacts. These moderating elements form the foundation of the institution's optimistic scenario, which projects 2.85% economic growth.
Under the institution's general scenario, which assumes tariffs exceeding 10% but otherwise stable conditions, Taiwan's economy would expand by a modest 1.66%. The most concerning projection — the pessimistic scenario—anticipates extended tariff implementation, eroding consumer confidence, and potential recessions in the United States and other key economies, resulting in Taiwan's growth plummeting to just 0.16%. Lien placed the probability of this worst-case scenario at 10% to 20%, acknowledging the exceptional forecasting challenges during the current 90-day tariff buffer period.
The economist highlighted Taiwan's particular vulnerability to the escalating trade tensions, with the U.S. imposing 245% tariffs on Chinese imports and China responding with 125% retaliatory measures. As a major trading partner to both economic powers, Taiwan faces significant exposure to these disruptions, though Lien expressed cautious optimism that the tensions would eventually subside.
