32% tariffs on Taiwan to hit machine tool, ICT sectors: Trade groups

Taipei, April 4 (CNA) Sectors whose exports are largely destined for the United States -- including ICT end-products and machine tools -- are likely to be hit hard once U.S. President Donald Trump's new tariffs on Taiwanese goods take effect, industry groups in Taiwan warned Thursday.

The groups were reacting to Trump's announcement on Wednesday (Washington time) of sweeping "reciprocal tariffs" on dozens of countries, including Taiwan, whose exports to the U.S. will face an import duty of 32 percent starting April 9.

The Chinese National Federation of Industries (CNFI), which comprises 158 member associations across a wide range of manufacturing sectors in Taiwan, said Thursday in a statement that the scope of the new tariff covers major Taiwanese exports to the U.S.

These include electronics, machinery (such as machine tools and precision instruments), transportation equipment (including auto parts and bicycles), as well as steel, aluminum, and products made from the two metals, the federation said.

According to the White House, only a number of goods, such as copper, pharmaceuticals, semiconductors, lumber, energy and "certain critical minerals" will be exempt from the latest economic measure.

The CNFI noted, however, that while semiconductors are currently exempt from the new measure, tariffs on servers and ICT end-products containing Taiwanese chips will have a major impact on related industries.

The CNFI said the 32 percent tariff on Taiwan is higher than that imposed on South Korea (25 percent), Japan (24 percent), and the European Union (20 percent), and it expressed concern over its impact on Taiwan, which it said is already facing intense global competition.

In the same vein, the Taiwan Machine Tool & Accessory Builders' Association (TMBA) said Thursday that new tariff to be imposed by the U.S. poses a severe challenge to Taiwan's machine tool and component sectors.

The U.S. is the second-largest export market for Taiwanese machine tools, accounting for around 15 percent of all exports in 2024, while exports of key components to the U.S. make up around 7 percent of the total, according to a TMBA statement.

The 32 percent tariff stems largely from Taiwan's growing trade surplus with the U.S. in recent years, driven largely by exports of semiconductors and related products, the TMBA said.

The broad-based tariff resulting from the trade surplus is being borne, however, by the entire industrial sector, placing significant operational pressure on the machine tool industry, which is composed mainly of small and medium-sized enterprises, the association said.

Meanwhile, the Third Wednesday Club, an association of business heavyweights based in Taipei, said in a news release Thursday that Trump's policy will significantly impact the semiconductor and traditional manufacturing sectors in Taiwan.

The group put forward five recommendations to Taiwan's government, including forming a negotiating team to engage in tariff talks with the U.S. and seek the most favorable terms for Taiwan, as well as actively pursuing a Taiwan-U.S. bilateral tax agreement to avoid double taxation.