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Taiwan's orchid, machine, plastics exports affected by U.S. tariff

08/07/2025 12:15 PM
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CNA file photo
CNA file photo

Taipei, Aug. 7 (CNA) Taiwan's phalaenopsis orchid, plastics and machine tool exports will face heightened competition on Thursday as the United States begins imposing a 20 percent temporary tariff on Taiwanese imports, according to Taiwan's Executive Yuan, though some industry players expect a "limited" impact.

Executive Yuan Secretary-General Kung Ming-hsin (龔明鑫) said on Wednesday that while the 20 percent rate marks a reduction from an earlier 32 percent proposal, individual industries are likely to experience uneven and significant impacts.

He singled out phalaenopsis orchids, also known as moth orchids, as a particular concern, noting that Taiwan currently holds a 46 percent share of the U.S. market.

However, Taiwan's main competitor in this industry, the Netherlands, holds 40 percent and faces a lower 15 percent tariff.

Kung also warned that Taiwanese companies had been contending with a 10 percent tariff since April, and the jump to 20 percent will create new pressure.

To address the situation, the Executive Yuan plans to draft a resilience special budget, which "still requires time for review," while providing immediate short-term assistance, he said.

Deputy Trade Representative Yen Huai-shing (顏慧欣) of the Executive Yuan's Office of Trade Negotiations said Taiwan's 20 percent rate represents the second-largest tariff reduction among countries that have a trade deficit with the United States.

Yen described the 20 percent tariff due to be imposed Thursday as "a temporary tariff," adding that "August 7 is not the deadline for talks."

Taipei is "still in negotiations" with Washington, Yen said, citing a notice received by Taiwan's negotiating team before July 31 that the "Taiwan-U.S. concluding meeting had not been completed."

She said only the European Union secured a more favorable 15 percent rate than Taiwan, while Japan and South Korea -- which also received 15 percent -- have smaller trade deficits with the U.S.

Later on Wednesday, Formosa Plastics Group said the new U.S. tariff would have only limited direct impact, as the comany's export volume to the U.S. is relatively low.

However, the Taiwanese company cautioned that indirect effects could be significant. It warned that high tariffs may drive inflation and weaken U.S. consumer spending.

Formosa Chemicals & Fibre Corporation Chairman Hong Fu-yuan (洪福源) previously said the company exported NT$5.1 billion worth of goods to the U.S. in 2024 -- about 2 percent of its total annual revenue of NT$243.8 billion.

He said over half of those U.S.-bound exports could be managed to avoid tariffs, while the rest would be withdrawn from the American market.

Also on Wednesday, Yang Te-hua (楊德華), former chairman of Taiwanese machine tool company Fair Friend Group (FFG), said his company had already raised low-cost inventory levels at its U.S. warehouses to offset short-term impact.

He added that only 10 percent of FFG's exports go to the United States, meaning the overall effect on the group would be limited.

(By James Thompson, Lai Yu-chen, Chung Jung-feng and Tseng Jen-kai)

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