January
2025
Following the announcement of significant tariffs on imports from Canada, Mexico, and China, President Donald Trump threatened to levy tariffs of up to 100% on Taiwan’s semiconductor exports. These measures have raised global alarm about a trade war and its impact on global economic growth; in response, Taiwan's economy ministry has introduced measures to assist these companies in relocating to Southeast Asia, India, or the United States, offering information on investment options, local laws, and partner-finding assistance.
Summary
Macroeconomists and policy analysts in the U.S. and Taiwan have warned that the tariffs, intended to bring semiconductor manufacturing to the U.S., are likely to backfire, as competing incentives will likely cause Taiwanese companies to move operations to countries other than the United States. Similarly, a trade war involving Taiwan is likely to create strong negative consequences for the U.S. tech industry by raising input costs. In the short term, the threat of U.S.-imposed tariffs is likely to lower trust between the United States and its Asian allies. In Taiwan, the K.M.T., which has long argued that the United States is an unreliable partner, may see some political gains as it claims vindication; elsewhere, we should expect U.S. allies like Japan and South Korea to move to insulate themselves from the consequences of a global trade war
Analysis
