TAIPEI (TVBS News) — The United States implemented a reciprocal tariff Thursday (Aug. 7), setting Taiwan's provisional rate at 20 percent. Formosa Plastics Group (台塑), Taiwan's largest petrochemical conglomerate, assessed that this trade move will have limited direct impact on operations due to low U.S. export proportions. The industrial giant plans to leverage its Texas manufacturing facilities to explore local procurement opportunities, reducing the tariff's operational impact.
Hong Fu-yuan (洪福源), chairman of Formosa Chemicals & Fibre Corporation (台化), revealed that the company's 2024 U.S. exports totaled approximately NT$5.1 billion (around US$171 million), representing merely 2 percent of its previous year's massive NT$243.8 billion (around US$8.2 billion) revenue. Formosa Chemicals strategically stated it can maneuver around the punitive tariff for approximately half of its U.S.-bound products through alternative channels. The petrochemical manufacturer will cease exporting the remaining half of affected products entirely, thereby minimizing direct financial impact on company operations.
Formosa Chemicals emphasized the critical need to monitor potential inflation and significantly weakened consumer spending patterns resulting from the implementation of high punitive tariffs. The Taiwanese petrochemical giant considers Southeast Asia its most significant and strategic export market, despite acknowledging that many end consumers of its products ultimately reside in the United States. The company remains cautiously optimistic about navigating these complex trade dynamics through diversified market strategies and operational flexibility. ◼ (At time of reporting, US$1 equals approximately NT$29.890)
