The Japan Times - Taiwan exporters count the cost of Trump's 'ridiculous' tariffs

EUR -
AED 4.156558
AFN 80.913812
ALL 97.778875
AMD 440.735175
ANG 2.039573
AOA 1035.465816
ARS 1360.257311
AUD 1.754493
AWG 2.039811
AZN 1.924429
BAM 1.949094
BBD 2.282746
BDT 137.367392
BGN 1.955808
BHD 0.426557
BIF 3315.753754
BMD 1.131657
BND 1.457187
BOB 7.829064
BRL 6.438914
BSD 1.13061
BTN 95.370879
BWP 15.351185
BYN 3.69997
BYR 22180.468796
BZD 2.270987
CAD 1.5646
CDF 3251.249056
CHF 0.931393
CLF 0.027715
CLP 1063.528181
CNY 8.228558
CNH 8.168614
COP 4862.445372
CRC 571.832628
CUC 1.131657
CUP 29.988899
CVE 110.845943
CZK 24.925875
DJF 201.118099
DKK 7.461657
DOP 66.48487
DZD 149.879599
EGP 57.341945
ERN 16.974849
ETB 148.281979
FJD 2.556355
FKP 0.852473
GBP 0.851702
GEL 3.100658
GGP 0.852473
GHS 15.559931
GIP 0.852473
GMD 80.90732
GNF 9795.048603
GTQ 8.707044
GYD 236.536205
HKD 8.7707
HNL 29.253788
HRK 7.534233
HTG 147.711802
HUF 403.540245
IDR 18628.198819
ILS 4.093332
IMP 0.852473
INR 95.682705
IQD 1482.470108
IRR 47656.886759
ISK 146.821422
JEP 0.852473
JMD 179.323045
JOD 0.802687
JPY 162.823313
KES 146.130389
KGS 98.963569
KHR 4533.40297
KMF 491.72137
KPW 1018.490914
KRW 1566.246456
KWD 0.347102
KYD 0.942159
KZT 584.798021
LAK 24454.863811
LBP 101301.575121
LKR 338.6748
LRD 226.122034
LSL 20.862128
LTL 3.341488
LVL 0.684528
LYD 6.172763
MAD 10.430414
MDL 19.469017
MGA 5041.530187
MKD 61.522095
MMK 2375.98608
MNT 4043.39787
MOP 9.025448
MRU 44.875829
MUR 51.478758
MVR 17.424031
MWK 1965.687693
MXN 22.308121
MYR 4.789194
MZN 72.369166
NAD 20.862073
NGN 1816.964407
NIO 41.599404
NOK 11.76228
NPR 152.593009
NZD 1.895717
OMR 0.435689
PAB 1.13061
PEN 4.144694
PGK 4.596838
PHP 62.956386
PKR 318.164973
PLN 4.267331
PYG 9036.9088
QAR 4.120314
RON 4.978162
RSD 117.355828
RUB 91.095604
RWF 1605.820675
SAR 4.244512
SBD 9.470095
SCR 16.582217
SDG 679.54969
SEK 10.939232
SGD 1.465145
SHP 0.889304
SLE 25.745147
SLL 23730.254094
SOS 646.74483
SRD 41.701235
STD 23423.006218
SVC 9.892964
SYP 14713.647864
SZL 20.862083
THB 37.140887
TJS 11.758246
TMT 3.960798
TND 3.392724
TOP 2.650454
TRY 43.687945
TTD 7.679579
TWD 34.237162
TZS 3052.641721
UAH 47.01096
UGX 4134.774439
USD 1.131657
UYU 47.446761
UZS 14643.636255
VES 100.27782
VND 29394.779437
VUV 137.035041
WST 3.144335
XAF 653.707938
XAG 0.034264
XAU 0.000337
XCD 3.058358
XDR 0.816671
XOF 651.834397
XPF 119.331742
YER 276.746662
ZAR 20.687644
ZMK 10186.267566
ZMW 31.175741
ZWL 364.392954
  • RBGPF

    66.2400

    66.24

    +100%

  • BCE

    -0.0600

    21.39

    -0.28%

  • JRI

    -0.0200

    13.05

    -0.15%

  • CMSC

    -0.0800

    22.02

    -0.36%

  • CMSD

    -0.0600

    22.26

    -0.27%

  • SCS

    -0.1700

    9.97

    -1.71%

  • NGG

    0.1600

    71.84

    +0.22%

  • RELX

    0.0200

    55.04

    +0.04%

  • BCC

    -3.6800

    92.47

    -3.98%

  • RIO

    -0.1300

    59.57

    -0.22%

  • GSK

    -0.2200

    38.85

    -0.57%

  • AZN

    -0.3500

    72.09

    -0.49%

  • VOD

    -0.0100

    9.6

    -0.1%

  • RYCEF

    -0.0200

    10.4

    -0.19%

  • BTI

    0.5800

    43.75

    +1.33%

  • BP

    1.0600

    29.18

    +3.63%

Taiwan exporters count the cost of Trump's 'ridiculous' tariffs
Taiwan exporters count the cost of Trump's 'ridiculous' tariffs / Photo: Handout - TAIWAN PRESIDENTIAL OFFICE/AFP

Taiwan exporters count the cost of Trump's 'ridiculous' tariffs

Taiwanese exporters are crunching numbers and talking to American clients as they scramble to figure out how to respond to US President Donald Trump's tariff blitz that threatens to derail their businesses.

Text size:

While the final impact is not yet known, factory owners on the island are clear eyed on one thing: moving operations to the United States is easier said than done.

"Taiwan's structure is what makes this industry viable," the owner of a machine tool exporter told AFP on the condition of anonymity, highlighting the island's network of small and medium-sized factories supplying his company.

"There are so many components, like gears, belts and others -- the US doesn't have these industries. Setting up a factory in the US would not be worth it," he said, describing Trump's policy as "ridiculous".

From Wednesday, Taiwanese products shipped to the United States, including electronics, machinery components, auto parts and bicycles, will be hit with a hefty 32 percent levy.

It is part of Trump's far-reaching global tariffs that have rocked world markets and sparked recession fears, as he seeks to reduce the US trade deficit and push companies to shift manufacturing to American soil.

Many in Taiwan were stunned by the size of the duty, after chipmaking titan Taiwan Semiconductor Manufacturing Co's plan to invest an additional $100 billion in the United States raised hopes the island would be spared.

While chips have so far avoided tariffs, analysts have warned the critical sector could be impacted anyway as levies drive up the cost of iPhones, laptops and other technology, and reduce consumer demand.

- 'Unsophisticated understanding' -

Taiwanese companies have spent days calculating the impact on their operations and speaking to US clients about how to absorb the cost of the new tariff.

"They've been receiving a lot of calls or instructions," said Kristy Hsu, director of the Taiwan ASEAN Studies Center at Chung-Hua Institution for Economic Research.

She told AFP that US customers have requested deliveries be postponed or prices lowered.

Companies were also trying to determine if their products contained at least 20 percent "American content", which could partially shield them from Trump's levy, she added.

During Trump's first term in office, US tariffs against China prompted many Taiwanese companies operating there to relocate to Southeast Asia to avoid the tax.

This time, however, there are fewer places to hide.

Trump has slugged imports from Vietnam and Thailand with 46 percent and 36 percent tariffs, respectively, and there was uncertainty about whether duties could be cut or raised even higher.

"Right now, the only option for setting up factories overseas is the United States, but the cost of doing so is extremely high," an official from an electronic industry group told AFP.

"This truly isn't something that can be done easily," she said, adding "we didn't expect the US would come down this hard."

Trump's across-the-board tariffs revealed an "unsophisticated understanding" of how supply chains worked, said Ho Ming-yen, non-resident fellow of the Research Institute for Democracy, Society and Emerging Technology.

- Levy 'impossible to absorb' -

Even if companies shifted their factories to the United States, they would still be slugged with tariffs on imported components needed for their products, Ho said.

Ho expected most Taiwanese companies would likely take a "wait-and-see" approach and cut costs as they "wait for the calamities to end".

Taiwan President Lai Ching-te said he had no plans for "retaliatory tariffs" against the United States, the island's most important security partner.

The government has pledged US$2.7 billion to help affected industries, but that was a "drop in the ocean" for what was needed, said Jason Hsu, senior fellow at the Hudson Institute think-tank.

Hsu estimated tariffs would cost Taiwanese exporters US$15 billion-US$20 billion a year.

To secure any relief from Trump, Taiwan needed to come up with deals for the president, said Hsu, a former member of Taiwan's legislature for the opposition Kuomintang party.

"Trump doesn't care about allies and partnerships, he cares about how much business you can bring to the US," Hsu said.

The machine tool exporter said the United States was a "very important market" for the company, accounting for 30-40 percent of its sales.

While the business would survive in the short term, the owner hoped Taiwan could strike a deal with Washignton.

"A four to five percent hike we can split (with our clients) and absorb," he said.

"But 32 percent is impossible to absorb. Our profit margin isn't that high."

S.Fujimoto--JT