The United States has imposed a 20% reciprocal tariff on Taiwanese goods effective August 7, 2025. Da-Nien Liu, Director of the Regional Development Study Center at the Chung-Hua Institution for Economic Research (CIER), noted that despite benefiting from the semiconductor and artificial intelligence industries, Taiwan’s exports have remained robust this year, with economic growth expected to exceed 4%. However, the latest forecasts indicate that growth will decline to approximately 2.8% next year, suggesting that the tariff impact cannot be ignored.
Director Liu analyzed that while the 20% tariffs primarily target traditional industries, whose export volumes to the US are smaller than those of semiconductors, these sectors employ large numbers of workers and are already experiencing significant pressure. Additionally, companies’ effective tax burden will increase from an average of 3.3% to 23.3%, which will impact industrial competitiveness and employment.
He also warned that US protectionist measures could trigger a chain reaction, with other countries potentially following suit by adopting anti-dumping and other measures to further escalate global trade protectionism. For Taiwan’s export-oriented economy, any obstruction to exports would inevitably pose severe challenges to overall economic performance.
Author: CIER Editorial Team
Date: September 1, 2025