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Central Bank: Taiwan's risks in Trump's tariff war are low, but semiconductor cluster may be weakened US President-elect Trump plans to impose tariffs of 10% to 20% on all imports and 60% on Chinese goods, raising concerns among many nations. Taiwan is classified as a low-risk country according to the "Trump Risk Index," but its semiconductor industry may still face challenges from these policies. Factors influencing tariff decisions include trade balance with the U.S. relative to GDP, military expenditures, diplomatic relations with China, and existing trade policies. Despite being at lower risk compared to South Korea and Japan, Taiwan still has a higher risk concerning trade volume with the U.S. However, its alignment with U.S. positions on China mitigates potential tariff impacts. Hidden concerns persist, particularly if Trump demands domestic manufacturing alongside tariff imposition, which could disrupt Taiwan's semiconductor sector and weaken its industrial clusters. The International Monetary Fund warns that a 10% tariff may destabilize global trade and long-term economic growth. The Institute of Economics of Academia Sinica emphasizes the interconnectedness between Taiwan, the U.S., and China. A slowdown in either economy could adversely affect Taiwan’s projected growth of 3.1% for the coming year, potentially dropping to 2.93% if both the U.S. and China experience downturns. #Semiconductors #Taiwan Want more analysis of major developments in AI, semiconductors, and cloud computing in Asia? Subscribe now to the Cognitive Asia newsletter--free of charge--at Substack https://lnkd.in/g4s6bqfi https://lnkd.in/gE6GPwJS

Trump warns Taiwan chip tariffs "may reach 100%" Presidential Office: Taiwan and the United States have close relations and create a win-win situation U.S. President Trump is contemplating imposing tariffs of up to 100% on computer chips from Taiwan, targeting the country's dominant position in the global chip market, where it accounts for 98%. This move would extend existing tariffs on Chinese electronic products, as part of Trump's strategy to bring semiconductor production back to the U.S. Taiwan's Ministry of Economic Affairs responded by highlighting the complementary nature of the high-tech industries in both Taiwan and the U.S. Presidential Office spokesperson Kuo Yahui emphasized the enduring cooperation and trust in the semiconductor sector and affirmed Taiwan's commitment to closely monitor U.S. policies while fostering collaboration to address global challenges. Trump's approach represents a departure from former President Biden's CHIPS and Science Act, which allocated over $52 billion to boost domestic semiconductor manufacturing. Trump criticized Biden's strategy, expressing a preference for incentives over subsidies, aiming to discourage imports from Taiwan and promote domestic production. #Semiconductors #Taiwan https://lnkd.in/dFwgfMe7

Trump threatens to impose high tariffs on chips! Financial experts list seven facts that slap the face: TSMC will not be injured On January 27, 2025, U.S. President Trump criticized Taiwan's significant role in chip production, claiming it manufactures 98% of the world's chips. He threatened to withdraw subsidies and impose steep tariffs on Taiwanese chips, causing market unease. Financial analyst Xu Meihua argued that such tariffs would largely harm American companies and consumers rather than TSMC or the Taiwanese semiconductor supply chain. Xu pointed out that Trump's proposed tariffs, possibly up to 100%, are a response to the Biden administration's "Chip Act." She stated that using tariffs to incentivize TSMC to move manufacturing to the U.S. is misguided, given TSMC's unique capabilities that other countries cannot match. As a result, tariffs would likely increase costs for American manufacturers instead of prompting TSMC to relocate. Furthermore, Xu highlighted the complexities of taxing chips due to intricate supply chains involving multiple countries. Chips from TSMC often go to China, Vietnam, and India before reaching U.S. consumers, complicating the application of tariffs. She also noted that global trade regulations currently exempt semiconductors from tariffs. Ultimately, high tariffs would increase costs for American companies and consumers, adversely affecting both the U.S. and global economies. #Semiconductors #Taiwan https://lnkd.in/g52XUPuv

Trump also named Taiwan’s Ministry of Chip Economics: The United States and Taiwan are complementary and a win-win situation U.S. President Trump threatened on January 27 to revoke subsidies allocated by the Biden administration for domestic wafer manufacturing. He emphasized the synergy between the semiconductor industries in Taiwan and the U.S., advocating for American design to be paired with Taiwanese foundries. Trump announced plans to impose tariffs on imported semiconductors to encourage U.S. production. Trump pointed out that Taiwan currently dominates the semiconductor market, controlling around 98% of it. He warned that companies not establishing U.S. manufacturing could face tariffs as high as 100%. He criticized the Biden administration's subsidy strategy, suggesting that tariffs would more effectively motivate companies to return production to the U.S. The Taiwanese Ministry of Economic Affairs acknowledged the competitiveness of its chips and noted that tariffs would impact overall costs. U.S. tech firms depend on affordable Taiwanese semiconductors, and the introduction of tariffs could raise production costs, affecting product pricing and potentially causing dissatisfaction among U.S. companies. #Semiconductors #Taiwan https://lnkd.in/ddEXFi37

Why is the market share of electric vehicles increasing in China? Will the EU tariff war be effective? A report by PricewaterhouseCoopers Strategy estimates that in 2023, China's car exports to Europe could reach 440,000 units, while European exports to China may decline to 325,000 vehicles, primarily German-made. This represents a shift from the previous year when Europe exported 350,000 cars to China. Furthermore, the report highlights that in the second quarter of this year, Chinese-made cars accounted for nearly 65% of domestic sales, spurred by the growth of electric vehicles. The impact of the EU's special tariffs on Chinese electric vehicles is questioned, with the report's author suggesting that while short-term advantages may arise for European manufacturers, Chinese companies are likely to adapt and enhance their competitiveness in response. China’s government continues to support the electric vehicle sector through municipal subsidies and strategic goals for technological leadership. #MotiveAsia #Taiwan https://lnkd.in/gXGce-cz

The United States increases tariffs on Chinese semiconductors: the short-term transfer order effect is not obvious The United States has decided to increase tariffs on Chinese-made semiconductor products to 50% by 2025. UMC stated that the short-term customer transfer effect may not be significant, but they are looking to cater to customer needs through a dispersed production capacity layout. Research institutions believe that Taiwan wafer foundries may receive customer transfer orders due to the tariff increase. UMC is evaluating the impact on its operations and plans to respond through product, customer, and market mix adjustments. The company's shareholders meeting recognized last year's financial report and approved a cash dividend distribution. Operations are expected to remain flexible despite the changing international situation. #Semiconductors #Taiwan https://lnkd.in/g4uJmVWX

European Parliament discusses China's electric car case, EU official: Negotiations with China can continue after investigation The EU's anti-subsidy investigation into China's electric vehicles is nearing completion, with a key discussion set for September 30 by the European Parliament's Trade Committee. Following the investigation, EU trade officials indicated that negotiations with China could proceed, which may help resolve significant trade tensions. The European Commission began this inquiry last year, with findings expected before October 30. Trade Defense Director Martin Lukas noted that over 40 personnel are involved in the investigation, highlighting its scale. Chinese government subsidies have allowed its electric vehicle sector to grow rapidly in the EU, increasing its market share from 3.5% in 2020 to 27.2% this year. Chinese brands' share alone rose from 1.9% to 14.1%. With about 3 million unsold electric vehicles in China, subsidized overcapacity poses a threat to the EU automobile industry. The Executive Committee suggests countervailing duties on electric vehicles between 7.8% and 35.3%, lower than the 100% tariffs seen in the US and Canada. Negotiations with China will continue after the investigation. While Chinese importers previously proposed a minimum import price to combat low-price competition, this was rejected. Future talks will depend on adherence to World Trade Organization regulations and monitoring of China’s commitments. The Trade Committee discussion revealed differing viewpoints, with Hungarian member Eniko Gyori questioning the rationale behind the trade conflict, while others criticized China for its role. Marketa Gregorova emphasized the need to hold China accountable for past agreements, drawing parallels with the EU's solar industry experience. Raphael Glucksmann urged the EU to counter China's coercive tactics and establish strong protections for strategic sectors. #MotiveAsia #Taiwan https://lnkd.in/g4Fdi89y

He Pingli | Imposing taxes on Chinese electric vehicles will damage China-EU economic and trade relations: The EU urgently needs to act with caution The European Union is set to vote on imposing additional tariffs on electric vehicles from China, potentially reaching 35.3%. The European Commission asserts that Chinese manufacturers enjoy significant government subsidies, creating unfair competitive advantages. If 15 EU member states do not oppose the tariffs in the upcoming vote, the new tax would be enacted by the end of October, alongside the existing 10% import duty. While several EU countries support these tariffs, others, including Spain, are pushing for dialogue to avert trade conflicts. Spanish Prime Minister Sanchez has shifted from advocating for tariffs to seeking political solutions. Similarly, German leaders, including Chancellor Scholz, have expressed a desire for stable trade relations to avoid escalating tariffs. The EU aims to eliminate traditional fuel vehicles by 2035, viewing Chinese electric vehicles as crucial for its green transition. Analysts caution that imposing tariffs could impede the EU's green goals due to the slow adaptation of its domestic auto industry. Furthermore, protectionist measures are often counterproductive, worsening economic conditions without ensuring success. China has advocated for trade solutions that align with World Trade Organization standards to de-escalate tensions. A recent proposal from Chinese electric vehicle manufacturers to address EU subsidy concerns was rejected by the European Commission. Officials stress the need for a negotiated solution to prevent a trade war that could negatively impact global supply chains and climate goals. #MotiveAsia #China https://lnkd.in/g38Xsgsu

🚗 🇨🇳 Our Head of the Prague office, Filip Šebok, commented for Chinese Voice of America on the EU-China trade dispute. The EU has postponed the vote, originally scheduled for Sept 25, on whether to impose tariffs of up to 35.3% on electric cars imported from China. 💬 Filip sees the dispute over electric car tariffs as one of many manifestations of rising tensions between the EU and China over trade. He notes, “Given the new European Commission's focus on improving European competitiveness, including better protecting the EU market from what it identifies as unfair practices by China, I believe these tensions will continue.” 🇪🇺 However, Filip explained, this won’t deal a fatal blow to China's interests, as some Chinese automakers will still be able to profit in the EU market, which remains more open than in the US or Canada. 🔗 Read the full article here: https://lnkd.in/esu6FgAY

EU passes tariff proposal on Chinese electric cars, but Germany hopes for settlement EU member states have approved a tariff proposal to increase taxes on imported electric vehicles from China. The decision received backing from 10 member states, with 5 opposing it and 12 abstaining. Germany, whose automakers are concerned about possible trade retaliation, stood against the proposal, highlighting the potential negative impact on the European auto industry. China responded quickly by launching investigations into EU dairy products, brandy, and pork, viewed as retaliatory measures. BMW CEO Oliver Zipse and other automakers stress the need for rapid reconciliation between the EU and China to avert a trade war. The European Commission is negotiating with Chinese officials to reach a compromise, which may include a minimum sales price for Chinese electric vehicles in Europe. Amid fears of overcapacity in China, with an annual surplus of 3 million electric vehicles, there is an urgent need for resolution. With the U.S. and Canada already imposing significant tariffs, European markets are seen as a likely target for these excess vehicles. The EU continues to uphold its tariff stance despite a trend of decreasing prices for Chinese cars, raising scrutiny of the trade tensions and their impact on the global automotive industry. #MotiveAsia #Taiwan https://lnkd.in/gg7jEifs