Taiwan's exports to remain stable in 2nd half of 2025 despite Trump tariffs: TIER

Taipei, Aug. 25 (CNA) Taiwanese goods are forecast to face only a limited impact from tariffs imposed by the United States, the Taiwan Institute of Economic Research (TIER) said Monday, citing the halted slump of its business climate indicator for manufacturing.

The monthly indicator for the manufacturing sector stood at 86.80 in July, up 1.17 points from June, halting a five-month decline, the local think tank said at a news conference in Taipei.

Gordon Sun (孫明德), director of the TIER Economic Forecasting Center, attributed the change to declining uncertainties over U.S. tariffs, which was also reflected in a general depreciation of the Taiwan dollar starting in July.

He added that China's problem of excess production capacity -- one of the three major challenges for Taiwan's industry in 2025 -- has eased.

Information and communication technology products and electronic components, largely tied to artificial intelligence-related applications, accounted for 75.3 percent of Taiwan's exports in July, with most of these products being unaffected by U.S. tariffs, Sun said.

"There is no need to worry about Taiwan's exports at present," Sun said, adding that the Directorate-General of Budget, Accounting and Statistics has revised Taiwan's export growth forecast for 2025 from 6 percent in February to 23 percent in July.

Taiwan recorded exports worth US$56.7 billion in July, the highest monthly figure on record, up 42 percent from a year earlier, according to the Ministry of Finance's Department of Statistics.

The country's export growth rate of 28.3 percent in the first seven months of 2025 also far outperformed other major economies such as South Korea, Japan, China and the U.S., with Singapore's 10.1 percent being the closest.

However, Sun cautioned that Taiwan's exports rely heavily on AI-related products, and that the country's increasing sales of these goods to the U.S. could raise the risk of friction with Washington.

Citing a poll of manufacturers, Sun said most firms believed July would be better than June, with the second half of the year remaining stable rather than worsening.

Compared with exports, Taiwan's sluggish domestic market poses a more urgent challenge for the government, Sun argued.

The business climate indicator for the building and construction industry dipped 0.96 points, while stagnation in the auto sector -- linked to expectations of lower tariffs on U.S.-made vehicles -- led to a 17.6 percent drop in newly registered passenger cars.

Retail sales fell 2.9 percent in June and 0.4 percent in the first half of the year. Excluding vehicles, however, sales would have risen 1.1 percent in June and 1.4 percent in the first half, Sun said, citing data from the Ministry of Economic Affairs.

The central bank could consider adjusting the forex rate in tandem with the U.S. as a potential measure to boost domestic demand, Sun suggested.