Da-Nien Liu, Director of the Regional Development Study Center at the Chung-Hua Institution for Economic Research (CIER), points out that Trump’s trade philosophy, centered on “whoever has a deficit gets taxed,” threatens to make Taiwan among the first victims of the new high tariff norm. The United States recorded a merchandise trade deficit of $1.2 trillion in 2024, which Trump views as foreign countries taking advantage. His approach targets not only China but also extends pressure to major trading partners, including Taiwan, Canada, and Mexico, with a preference for applying pressure via bilateral agreements.
The United States is currently Taiwan’s second-largest export market, accounting for 28.7% of total exports while surpassing the combined exports to China and Hong Kong. Should the U.S. impose additional tariffs, it would directly impact Taiwan’s core industries, including technology, semiconductors, and mechanical components. Even if tensions ease, the U.S. would likely only remove punitive tariffs while keeping most-favored-nation treatment unchanged, requiring manufacturers to adapt long-term to a high-tariff environment.
Director Da-Nien Liu emphasizes that reciprocal tariffs and Section 232 special investigations under Trump’s policies have become structural risks. Taiwan’s industries should focus on accelerating supply chain diversification and smart manufacturing while reinforcing the country’s origin identity. Additionally, it is crucial to monitor negotiation patterns between the U.S. and other nations and to strengthen direct communication with the U.S. This approach will help mitigate risks and sustain competitiveness in the global market.
Author: CIER Editorial Team
Date: September 9, 2025