The “232 Tariffs” will be a key focus of future US policy, covering semiconductors, critical minerals, pharmaceuticals, automotive components, and steel, aluminum, and copper products. The US has already imposed a 25% tariff on vehicles and a 50% additional tariff on steel, aluminum, and copper. Taiwan’s core export product, semiconductors, is also on the list. The US is expected to require Taiwan to offer investments and procurement in exchange for lower tariff rates. Although Taiwan’s exports to the United States reached US$97.5 billion in the first 7 months of this year, surpassing mainland China for the first time to become Taiwan’s largest export market, the direction of future negotiations will profoundly impact Taiwan’s economic growth and supply chain deployment.
Hsien-Ming Lien, President of the Chung-Hua Institution for Economic Research (CIER), points out that Taiwan is at a disadvantage compared to Japan and South Korea in negotiations due to the lack of a military alliance, making direct negotiations with Trump challenging. Trump’s pragmatic and unpredictable approach means concessions are unlikely based solely on “friendly relations.” If Taiwan hopes to secure lower tax rates, it must prepare a “substantial package” including large-scale investments, opening markets to U.S.-standard products, or importing agricultural products. President Lien emphasizes that if an agreement is reached but then rejected domestically, it could cause long-term damage to Taiwan-U.S. relations. If Taiwan chooses not to negotiate, it must bear the pressure of high tariffs. If Taiwan chooses not to negotiate, it must bear the pressure of high tariffs. Taiwan should not harbor illusions of “special treatment” but instead carefully assess the acceptable scope of investments and market openings while developing complementary measures to mitigate impacts.
Meanwhile, the global financial order is undergoing restructuring. Meng-Chun Liu, Director of the First Research Division at CIER, indicates that the global financial system is gradually shifting away from a “US dollar unipolar” structure toward a multicurrency coexistence and regional reserve system. Although the internationalization of the renminbi has potential, it still faces 3 major challenges: slow capital account opening, lack of transnational financial legal frameworks and investor protection, and strategic concerns about China from major economies.
Director Liu emphasizes that Taiwan is on the front line of US-China competition. Its monetary and financial policies must be centered on “institutional resilience” to achieve balance among efficiency, security, and sovereignty. He suggests that the government should continue to monitor institutional developments such as renminbi cross-border clearing, digital renminbi, and m-CBDC Bridge. It should also establish diversified backup clearing channels and leverage regional platforms such as RCEP and the Asian Infrastructure Investment Bank to enhance strategic flexibility and avoid over-reliance on a single system.
Additionally, “stablecoins” promoted by global private institutions deserve attention. Stablecoins backed by US dollar assets are substantial in scale, enhancing the dollar’s prevalence and soft power but weakening its hegemonic hard power. This will profoundly affect future international payment systems and the financial order.
In summary, Taiwan faces 2 major challenges: the pressure of US high-tariff trade negotiations and the financial security risks arising from the restructuring of the global monetary system. Taiwan must pragmatically address negotiation realities, avoid unrealistic expectations, and strengthen institutional resilience by building diversified financial and clearing backup mechanisms to maintain its supply chain advantages and financial security.
Author: CIER Editorial Team
Date: August 18, 2025