00:00So it's been a year since the U.S. tariffs were announced.
00:03Could you briefly tell us where we are now and how you will assess their impacts on Taiwan?
00:09And like which sectors have been hit the hardest and why?
00:12So at this moment, in April, 2026, everyone, all countries, including Taiwan,
00:19are paying a 10% with staking rate, MFN rate, based on a new legal foundation.
00:25But this 10% with staking, MFN rate, is valid only for 150 days.
00:34Beyond July, we just have to wait and see, can Taiwan go back to the reciprocal agreement tariff,
00:45which is 15% with no staking, or we're going to see new tariff rate introduced.
00:51What's the sectors affected? Well, first of all, 70% of Taiwan's exports into the U.S. are high-tech
00:58sectors,
00:58high-tech products, semi-com, AI servers primarily.
01:04And this past 70% of these trades are not affected by the reciprocal tariffs.
01:10Well, they are subject to a separate Article 232 investigation, but that's a separate case.
01:15So for the 30% of Taiwan's exports into the U.S. who are subject to this additional reciprocal tariff,
01:23we're seeing some early effects already, some negative impacts.
01:30So in the whole year of 2025, we see a decline of export growth for chemical products,
01:38for basic metals, for textile, and also for transportation products.
01:43What could be the best and worst scenarios for Taiwan's tariff deal moving forward with the U.S.
01:49following the Section 301 investigation?
01:52Well, the best scenario is they reduced the 15% to 10%.
01:56But I think the likelihood is quite limited because Trump wants to keep its tariff policy.
02:04The most efficient way to achieve the same outcome is to keep the outcome of the agreements before the ruling,
02:13by simply changing the legal foundation for that.
02:16The worst case scenario is that, okay, they believe that, you know, 15% is too low.
02:20And after the investigation of Article 301, they decided that there are a lot of trade practices
02:31existing across all the trading partners, and they decided to increase the tariff rate.
02:37Well, that's the scenario that everyone, including Taiwan, that are not willing to see.
02:44And also, I think the likelihood for that scenario is quite low.
02:48How significant will tariffs be for Taiwan's economy in the coming year?
02:52And what potential challenges or barriers do you foresee?
02:55Because of the continuing demand, growing demand from the U.S. side for the high-tech products,
03:02I think, I mean, there's a general agreement in Taiwan that our trade performance will be even
03:08better than the year 2025. So the tariff rate is not going to undermine the overall trade performance.
03:16It will put pressure on some of the traditional sectors, but overall trade is going to grow
03:22even more in the year 2026. There are remaining challenges that need to be addressed by Taiwan.
03:28The domestic process to ratify the art or the reciprocal tariff rate is one of the biggest challenges.
Comments