Taiwan unveils $8.7 billion in help for firms to deal with US tariffs

Taiwan’s government on Friday announced at least T$288 billion ($8.7 billion) in financial help for companies and industries to deal with the impact of US tariffs, including export credits.

US President Donald Trump on Wednesday announced across-the-board import tariffs, with much higher duties for dozens of trading partners including Taiwan, which runs a large trade surplus with the United States and is facing a 32 per cent duty on its products.

The US tariffs, however, do not apply to semiconductors, a major Taiwanese export.

Speaking at a news conference in Taipei, Premier Cho Jung-tai reiterated that the government regarded the tariffs as unreasonable, saying it would provide T$88 billion to help companies affected.

Finance Minister Chuang Tsui-yun, speaking next to Cho, said the government would also provide T$200 billion in trade financing for exporters.

The announcements were made before financial markets re-open in Taiwan on Monday, having been closed on Thursday and Friday for a holiday.

Taiwanese government officials have repeatedly said trade with the US has been skewed by strong demand for Taiwanese technology products, such as advanced semiconductors – a sector dominated by the island, home to major chipmaker TSMC.

TSMC last month announced a new $100 billion investment in the United States.

United States President Donald Trump’s decision to impose a raft of tariffs on key trade partner endangers global financial stability, will weigh on growth and increase volatility in inflation, key ECB policymakers said.

Among the closes United States allies, the European Union (EU) was targeted with a 20 per cent tariff, Japan with 24 per cent, South Korea with 25 per cent and Taiwan with 32 per cent.

“The US administration’s decisions to impose tariffs endangers global economic stability,” Bundesbank President Joachim Nagel said in a statement.

“In the face of the challenges of our time, strong alliances and fewer trade barriers are needed,” Nagel said. “The US is moving in a completely different direction.”

Luis de Guindos, the ECB’s Vice President meanwhile said such an environment requires extreme prudence from the ECB because the trade war could upset all expectations and make the outlook difficult to forecast.

Trade tensions could weaken the euro and increase import cost while extra spending on defence could boost overall demand and lift prices.

“Geopolitical tensions could also lead to higher inflation owing to trade disruptions, rising commodity prices and energy costs,” he said.

But weaker demand for Eurozone exports due to tariffs would weight on growth and lower price pressures, he argued.

Financial markets now see an 80 per cent chance of another ECB rate cut in April and most investors project another two steps later in the year.

Meanwhile Taiwan’s central bank held its policy rate unchanged last month as expected, prompted by lingering concerns over inflation and uncertainty about new United States trade tariffs.

The central bank slightly lowered its 2025 estimate for economic growth to 3.05 per cent from a forecast of 3.13 per cent given in December. Taiwan’s economy grew 4.59 per cent in 2024.

In a report released by the central bank after its quarterly rate-setting meeting, it said Taiwan so far had seen limited impact from higher United States tariffs on countries including Canada, Mexico and China, and the island’s export momentum would continue this year.

Trump has threatened across-the-board import tariffs, targeting countries with large trade surpluses with the United States, and has also said he could put tariffs on semiconductors, a sector Taiwan dominates.

Taiwan’s tech-focused economy, home to the world’s largest chipmaker TSMC, has powered ahead thanks to demand from companies such as Nvidia for artificial intelligence applications.

The central bank kept its consumer price index (CPI) forecast for this year at 1.89 per cent, unchanged from its December forecast.

Meanwhile Taiwan’s exports rose more than expected in February as demand for artificial intelligence related technologies got a boost from buyers trying to get ahead of new tariffs proposed by US President Donald Trump.

Taiwan firms such as TSMC, the world’s largest contract chipmaker, are major suppliers to Apple, Nvidia and other tech companies.