Taiwan will help companies relocate production from China, given the significant impact that the tariffs that new US President Donald Trump has promised to impose on the country could have on them, the Minister of Foreign Affairs said on Thursday. 'Economy Kuo Jyh-huei.
The threat by Mr Trump, who takes office in January, to impose 60% tariffs on US imports of Chinese goods poses significant risks to the growth of the world's second largest economy.
Taiwanese companies have invested billions of dollars in China over the past four decades, taking advantage of historically lower costs, but the Taiwanese government, aware of increased pressure from Beijing to accept China's sovereignty claims, encouraged its companies to move their investments elsewhere.
Speaking in Parliament, Mr Kuo said the impact of Mr Trump's tariffs on China on Taiwanese companies manufacturing there would be “quite significant”.
“We will as soon as possible help Taiwanese companies move their production bases,” he added, without giving details.
Mr Kuo was also asked by lawmakers about fears that Mr Trump would reverse subsidies for TSMC, the world's largest contract chipmaker, which is investing $65 billion in the US state of Arizona to build new factories there.
Mr Kuo said there was a contingency plan, including to help more supply chain companies set up shop in the United States.
“TSMC tends to continue to expand its investments in the United States,” he said.
TSMC has not yet commented on any concerns it may have regarding the subsidies. Its Taipei-listed shares rose about 1% on Thursday morning.
Taiwanese company GlobalWafers, which is investing $4 billion in the United States, told Reuters it expected subsidies under the Chips and Science Act, which aims to encourage investment by manufacturers of chips in the United States, be maintained under the new American administration.
“Multi-year and 10-year programs like the CHIPS Act and the agreements we signed are regularly rolled over from one administration to the next,” GlobalWafers said in a statement Thursday.
“We expect the CHIPS program to be no different and to proceed smoothly under the Trump administration.”
