In light of the potential impact of tariffs promised by US president-elect Donald Trump, Taiwan plans to support companies in moving production out of China, economy minister Kuo Jyh-huei announced on Thursday.
Kuo said, “We will as soon as possible come up with help for Taiwan companies to move their production bases.”
This announcement came as a result of major growth concerns for the world’s largest economy, China, after Trump, who will be assuming office in January next year, threatened to impose 60 per cent tariffs on US imports of Chinese goods.
Taking advantage of historically lower costs, many Taiwanese companies have invested billions of dollars in China for the past 40 years.
However, Taiwan’s government, concerned about increased pressure from Beijing to recognize China’s sovereignty claims, has been urging its companies to redirect investments to other locations.
Addressing the parliament, Kuo said that any Trump tariffs on China would have a “quite large” impact on Taiwanese manufacturing firms.
Kuo stated that there is a contingency plan in place, which includes assisting more companies in the supply chain to relocate to the United States.
“It is a trend for TSMC to keep expanding its investment in the United States,” he said.
Taiwan Semiconductor Manufacturing Company (TSMC) has not addressed concerns regarding the subsidies. Its shares, listed in Taipei, closed up 0.5 per cent on Thursday, aligning closely with the broader market, which finished 0.8 per cent higher.
Taiwan’s GlobalWafers, which is investing $4 billion in the United States, told Reuters that it expects the Chips and Science Act, designed to encourage investment by chipmakers in the US, will continue under the new US administration.
“Multi-year and decadal programs like the CHIPS Act and the agreements we have signed are regularly continued from one administration to the next,” it said in a statement on Thursday.
“We expect the CHIPS programme to be no different and run smoothly in the Trump administration.”