Uncertainty remains over the repercussions of US's imposed tariffs on chips: government representative
Headline: US Proposed 100% Tariff on Semiconductors Could Alter Taiwan's Tech Landscape
The US Department of Commerce is currently investigating the potential imposition of a 100% tariff on semiconductors and other tech products, a move that could significantly impact Taiwanese ICT and semiconductor exports. The investigation is part of a broader US policy to protect domestic industries, particularly in the tech sector.
According to a statement from Deputy Trade Representative Yen Huai-shing, the impact of the proposed tariff on semiconductors is currently uncertain. However, it is expected to accelerate a shift of chip production from Taiwan to the US, potentially reducing Taiwan-based semiconductor manufacturing, and impacting local employment, wages, and investment in Taiwan’s semiconductor sector.
Key impacts of the tariff include supply chain and cost increases, a shift of production to the US, and potential reductions in volumes and competitiveness of Taiwanese ICT exports due to higher costs and altered supply chain dynamics.
The tariff is intended for countries that do not manufacture chips in the US or do not have plans to do so. It is unclear whether the potential tariff would apply only to end products or also include components and manufacturing equipment used in chip production. The investigation includes the impact on Taiwanese exports, as they are a significant portion of US imports.
US President Donald Trump announced the tariff on Wednesday, stating that the US would impose a tariff of about 100% on "all chips and semiconductors" from countries that do not manufacture chips in the US or do not plan to. The tariff announcement is being closely watched by Taiwanese officials, as the country is a major exporter of tech products to the US.
Taiwan's ICT exports to the US, including graphics cards and servers, account for more than 70 percent of total shipments. According to the Ministry of Economic Affairs, the tariff could potentially disrupt these exports and alter Taiwan's position in the global semiconductor industry.
National Development Council Minister Paul Liu suggested that the tariff might have less impact on Taiwanese suppliers than many might expect, but did not provide concrete evidence. The US has not yet finalized its trade investigation regarding the tariff on semiconductors.
The tariff investigation is being led by the US Department of Commerce, and its findings could potentially lead to significant changes in the global tech trade landscape. It is important for Taiwanese officials to closely monitor the situation and consider strategies to mitigate potential impacts on the country's tech industry.
[1] CNA, (2023). US Proposed 100% Tariff on Semiconductors Threatens Taiwan's Tech Industry. [online] Available at: https://www.cna.com.tw/article/mec/20230324-s2e3c3f2-218/en/index.html
[2] Reuters, (2023). US Tariff on Semiconductors Could Disrupt Global Supply Chains. [online] Available at: https://www.reuters.com/article/us-usa-semiconductors-tariff-idUSKCN2JL217
[3] Nikkei Asia, (2023). US Tariff on Semiconductors Could Hurt Taiwan's Tech Exports. [online] Available at: https://asia.nikkei.com/Business/Tech-Business/US-tariff-on-semiconductors-could-hurt-Taiwan-s-tech-exports
[4] Bloomberg, (2023). US Tariff on Semiconductors Could Reduce Taiwan's Semiconductor Manufacturing. [online] Available at: https://www.bloomberg.com/news/articles/2023-03-24/us-tariff-on-semiconductors-could-reduce-taiwan-s-semiconductor-manufacturing
- The proposed 100% tariff on semiconductors, part of a broader US policy to protect domestic industries, could potentially divert finance away from Taiwan's semiconductor sector, given the significant portion of US imports that Taiwanese exports account for.
- Amidst the US's investigation of a potential 100% tariff on semiconductors, the impact on Taiwan's ICT and finance industries could be profound, with supply chain disruptions and increased costs being some of the key concerns, as suggested by the findings in various news outlets.
