Government relief and subsidies provide relief but uncertainty lingers
TAIPEI (Taiwan News) — Taiwan’s manufacturers are feeling the sting of the US’ 20% tariff on Taiwanese goods as the country scrambles to cushion the blow, Nikkei Asia reported Thursday.
Since the tariffs took effect in August, businesses in traditional sectors, from auto parts to bicycles, have seen orders stall and margins squeezed. President Lai Ching-te (賴清德) has promised the hit will be temporary but industry leaders say the damage is already spreading.
“Over 70% of traditional industries are undoubtedly affected,” said Jacob Wu, CEO of Tainan-based car component maker Coplus. “If you add tariffs of over 20% today, whether consumers will buy them is another matter.”
Coplus, which employs 130 workers, ships mainly to the US and credits the government for moving quickly to offer subsidies. “The process has been faster than ever, and the support arrived when we were most vulnerable,” Wu said.
Lai acknowledged the severity of the problem in his National Day address, announcing a NT$93 billion (US$3 billion) relief plan for affected companies and workers. The package covers sectors from manufacturing to agriculture and fisheries, aiming to stabilize jobs and exports.
However, the tariffs have also become a political test of Lai’s diplomatic skills with Washington. Any trade arrangement could face scrutiny in Taiwan’s opposition-led legislature, risking further delay and domestic backlash.
For business owners like Deana Lam, CEO of Taipei-based VooDoo Cycles, the uncertainty is the hardest part. “Are the tariffs staying or not?” she said, noting that bicycle exports are among the worst hit.
Government data shows a growing strain on the labor market. The Ministry of Labor reported in September that over 7,300 workers were on unpaid leave, with 90% from export-oriented manufacturers such as machinery and equipment.
Taiwan’s manufacturing activity also remained weak, with the September purchasing managers index at 48.3, marking four straight months of contraction, according to Chung-Hua Institution for Economic Research. Officials say the downturn underscores how deeply tariffs have disrupted supply chains.
In Kaohsiung, screw maker Sheh Kai Precision fears being priced out if Taiwan’s tariffs remain higher than South Korea or Japan’s, which secured 15% rates through talks. “If ours stay at 20%, we’ll have no margin left,” said Assistant Vice President Tsai Sung-chun (蔡松峻).
Despite the challenges, some see a chance to adapt. Tsai said the company is considering expanding to new markets, adding the government has pushed trade missions to Southeast Asia to reduce US dependence.
Others are cautiously optimistic that a deal could soon materialize. US-Taiwan Business Council President Rupert Hammond-Chambers said both sides are “extremely close” to a formal announcement, a development businesses hope will lift the cloud of uncertainty.
Oct. 23, 2025 15:24
Michael Nakhiengchanh
Taiwan News, Staff Writer