On the eve of U.S. President Donald Trump’s announcement to temporarily suspend the reciprocal tariff policy, The Washington Post and Agence France-Presse (AFP) published reports on April 9 citing Ming-Yen Ho, a Non-Resident Fellow at the Research Institute for Democracy, Society, and Emerging Technology (DSET), analyzing the potential impact on Taiwan’s industries.
The global trade landscape is once again undergoing major changes. President Trump announced today that he has authorized a temporary suspension of reciprocal tariffs for countries willing to enter negotiations with the United States. During this period, a reduced reciprocal tariff of 10% will be applied. At the same time, tariffs on China—retaliating against U.S. measures—will be raised to 125%.
Simultaneously, President Lai Ching-te published an op-ed in Bloomberg titled A Roadmap for Deeper Taiwan-U.S. Trade Ties, emphasizing Taiwan’s commitment to respond to Trump’s tariff policy through reducing tariffs with the U.S.,expanding procurement and investment in the American market, and removing non-tariff trade barriers.
During the upcoming critical 90-day negotiation period, Washington’s stance on semiconductor tariff exemptions, as well as the broader policy trajectory, will warrant close attention.
Although the reciprocal tariff policy currently does not directly apply to semiconductors, The Washington Post reported that exemptions on chips may not be sufficient to prevent downstream disruptions in the supply chain.
In an interview, Ho explained that a single chip could get shipped to multiple countries throughout its lifetime to be manufactured and packaged and assembled. Therefore, the exemptions for semiconductors don’t really work.
AFP focused on how the tariff policy is affecting Taiwanese firms, noting that some U.S. clients have already begun requesting shipment delays, price reductions, or are considering relocating production to the United States.
According to Ho, even if companies shifted their factories to the United States, they would still be hit with tariffs on imported components needed for their products. Ho expected most Taiwanese companies would likely take a “wait-and-see” approach and cut costs as they “wait for the calamities to end”.
Lien Hsien-ming, President of the Chung-Hua Institution for Economic Research and also Deputy Director at DSET, commented that the U.S. aims to push other countries into negotiations through raising the tariffs, hoping they’ll buy more American goods and services.
Trump’s reciprocal tariff policy not only poses challenges for Taiwan’s strategic industries but may also reshape the broader global economic and geopolitical order. DSET will continue to monitor the policy’s development and its implications for Taiwan and the international supply chain.