Taiwan to face high tariffs as U.S. aims to build supply chains: Analyst

Taipei, April 14 (CNA) Taiwan and other Asian countries could see high tariffs imposed on electronics and semiconductors by the United States as Washington seeks to force Asian electronics makers to invest in the U.S. market and build its own supply chains, an analyst with market research firm Digitimes said Monday.

In a statement, Eric Huang (黃逸平), vice president of Digitimes, said at a time when the U.S. aims to boost its manufacturing sector, the country is expected to take advantage of tariff barriers to force Asian countries, including Taiwan, to enter into negotiations and bring their electronics suppliers to the U.S.

The U.S. is not only looking at semiconductor makers in Taiwan and other Asian countries but the entire electronics supply chain, including critical components such as flat panels, Huang said.

In addition to Taiwan, the U.S. has set its sights on other Asian countries with electronics bases such as Japan and South Korea, along with Southeast Asian countries, Huang added.

Taiwan needs to prepare itself to respond to tariff threats from the U.S. down the road, he said.

Although the U.S. government said late Friday that it will exempt electronic imports from reciprocal tariffs, including computers, phones and semiconductors, Commerce Secretary Howard Lutnick said Sunday the exemption was "not permanent."

"We need to have semiconductors, we need to have chips, and we need to have flat panels -- we need to have these things made in America. We can't be reliant on Southeast Asia for all of the things that operate for us," Lutnick told "This Week" co-anchor Jonathan Karl.

In addition, U.S. President Donald Trump said on the Truth platform that his administration will take a look at semiconductors and the entire electronics supply chain in an upcoming National Security Tariff Investigation and "we will not be held hostage by other countries, especially hostile trading nations like China."

Under pressure from Washington, the global electronics market will be divided into three major parts in the future: the U.S., China and the market excluding the U.S. and China, Huang said.

Amid an escalating trade war between Washington and Beijing, electronics suppliers will relocate their production to the U.S. or to other countries which face relatively low tariffs, while China will roll out its own electronics devices for the domestic market, Huang added.

When electronics makers rush to invest in the U.S., Huang said, they will also speed up the pace of their investments in Mexico eyeing tariff free incentives under the United States-Mexico-Canada Agreement (USMCA), Huang said.

As for China, Beijing will continue to encourage tech suppliers to produce in the home market, which faces export controls and high tariffs from the U.S., so any foreign firm which wants a share of the market will need to buy components and assemble their products there, he added.

China is expected to expedite its efforts to develop chips used in artificial intelligence applications and electric vehicles as well as high bandwidth memory chips to own its supply chain, in a bid to break export restrictions imposed by the U.S. by pursuing de-Americanization, he noted.

On the other hand, the U.S. will try to achieve the goal of de-Sinicization, Huang said.