TAIPEI — Taiwan will help companies relocate production from China given the likely large impact from tariffs that incoming US President Donald Trump has promised to impose on the country, Economy Minister Kuo Jyh-huei said on Thursday (Nov 7).
A threat by Trump, who will take office in January, to impose tariffs of 60 per cent on US imports of Chinese goods poses major growth risks for 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 Taiwan's government, wary of stepped up pressure from Beijing to accept Chinese sovereignty claims, has been encouraging its firms to move investment elsewhere.
Speaking in parliament, Kuo said the impact of any Trump tariffs on China for Taiwanese firms manufacturing there would be "quite large".
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"We will as soon as possible come up with help for Taiwan companies to move their production bases," he said, without giving details.
Kuo was also asked by lawmakers about concerns Trump might cancel subsidies for TSMC, the world's largest contract chipmaker, which is investing US$65 billion (S$86 billion) in the US state of Arizona for new factories.
Kuo said there was a contingency plan, including helping more companies in the supply chain to move to the United States.
"It is a trend for TSMC to keep expanding its investment in the United States," he said.
TSMC has not commented on concerns it may have about the subsidies. Its Taipei-listed shares closed up 0.5 per cent on Thursday, roughly in line with the broader market, which ended up 0.8 per cent.
Taiwan's GlobalWafers, investing US$4 billion in the United States, told Reuters it expects the Chips and Science Act award aimed at encouraging investment by chipmakers in the United States would 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."
Taiwan and the United States have also been holding talks under a series of different trade initiatives that Taipei hopes will lead to a broad free trade agreement.
Taiwan's deputy trade representative, Yen Huai-shing, noted that one of the bilateral mechanisms, the US-Taiwan Economic Prosperity Partnership Dialogue, was begun under Trump's first administration.
Though Biden and the incoming Trump are from two different parties, "there seems to be a high degree of commonality in the direction of being friendly to Taiwan and increasing more bilateral exchanges," Yen told Reuters.
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