Taiwan industries urge tariff relief measures

TAIPEI (TVBS News) — In response to the U.S. tariffs, the Chinese National Federation of Industries (工業總會) urged the Taiwanese government to freeze electricity prices, delay carbon fees, and expand relief measures to mitigate the effects. The group announced Tuesday (Aug. 12) in a press release that the 20% tariff rate imposed on Taiwan by the U.S. on Aug. 7 could have deep impacts on the country's industries, including information technology products, hardware, and other exported goods.

The Bureau of Foreign Trade (貿易署) and the Office of Trade Negotiations (經貿談判辦公室) noted that this rate requires the addition of the Most-Favored-Nation (MFN) tariff and any anti-dumping or countervailing duties, raising concerns about the competitiveness of Taiwan's exports. The federation highlighted that Taiwan's reciprocal tariff rate exceeds the 15% tariff imposed on Japan and South Korea, potentially weakening product price competitiveness, affecting orders, and intensifying supply chain adjustment pressures.

The federation emphasized that the affected industries, primarily small and medium enterprises (SMEs), significantly contribute to Taiwan's economy and require attention. Tool machine manufacturers reported that the current impact surpasses that of the COVID-19 pandemic. The federation also called on the government to stabilize the exchange rate and expand the Small and Medium Enterprise Credit Guarantee Fund of Taiwan (信保基金) to help industries weather the crisis.

The federation pointed out that the appreciation rate of the New Taiwan dollar exceeds that of the Japanese yen and South Korean won, which combined with tariff pressures have affected the number of orders. The federation suggested a 10% devaluation of the exchange rate to offset the impact, and that the government subsidize employee salaries to reduce the risk of layoffs. Meanwhile, the government has proposed measures such as increasing loans for the diversified development of SMEs.

The Taiwanese government has stressed that the 20% tariff rate levied by the U.S. for Taiwanese goods is temporary, and that negotiations remain ongoing for a lower rate. While the current rate is a steep drop from the 32% initially proposed by the U.S. in April, it remains higher than the 15% imposed on Japan and Korea, which are regional export competitors. It remains unclear, however, whether Taiwan would be willing to create a large U.S.-bound investment fund similar to those set up by Japan and South Korea, which may have contributed to their lower tariff rate.