Taiwan says impact of proposed U.S. chip tariff still unclear

Taipei, Aug. 7 (CNA) Taiwan's deputy trade representative Yen Huai-shing (顏慧欣) said Thursday that the impact of a proposed 100 percent U.S. tariff on semiconductor imports could not yet be accurately assessed, as Washington has yet to finalize its ongoing trade investigation.

Speaking at a Cabinet press briefing, Yen said it remains unclear whether the potential tariff would apply only to end products or also include components and manufacturing equipment used in chip production.

Trump said Wednesday that the United States would impose a tariff of about 100 percent on "all chips and semiconductors" from countries that do not manufacture chips in America or do not plan to.

However, his comments were not a formal policy announcement and he did not give details. The U.S. Department of Commerce is still conducting a Section 232 investigation under the Trade Expansion Act of 1962, which could lead to import taxes on semiconductor and other tech products.

Yen noted that information and communications technology (ICT) products make up "a significant portion" of Taiwan's exports to the U.S. and are also subject to the Section 232 investigation currently underway.

According to the Ministry of Economic Affairs, Taiwan's ICT exports to the U.S. -- including graphics cards and servers -- account for more than 70 percent of total shipments.

Yen's comments followed remarks made by National Development Council (NDC) head Paul Liu (劉鏡清), who suggested the tariff plan -- floated by U.S. President Donald Trump -- would likely have less impact on Taiwanese suppliers than many might expect, though he did not provide concrete evidence.

Liu told lawmakers in Taipei that the development could be "positive" for Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, since it has already established a plant in the U.S. and continues to expand its presence.

Addressing the possible implications, Liu said Taiwan's chip exports to the U.S. totaled around US$7.4 billion in 2024. That figure drops to under US$6 billion when excluding shipments from TSMC and other firms with U.S. operations -- accounting for about 1.12 percent of Taiwan's total exports.

He argued that if all competitors are subject to the same tariff rate, the impact on Taiwan's industry would not be "as great as imagined."

Asked whether TSMC would, as Trump seemed to suggest, expand its U.S. investment from the current US$165 billion to US$300 billion, Liu declined to comment. He noted that he sits on TSMC's Board of Directors and that no such discussions had taken place.