Taiwan economists upbeat as U.S. tariff landscape shifts

Taipei, Feb. 25 (CNA) The Taiwan Institute of Economic Research (TIER) said Wednesday that changes in U.S. tariff policy are expected to shift economic pressure in a "lighter" direction and that recent developments highlight Taiwan's critical importance in the global semiconductor supply chain.

TIER researcher Liu Pei-chen (劉佩真), citing a New York Times report published on Tuesday, said successive U.S. administrations had tried to reduce reliance on Taiwanese chips with "limited results."

After the U.S. Supreme Court ruled on Friday that reciprocal tariffs were unconstitutional, U.S. President Donald Trump "immediately" mentioned Taiwan again, which "highlights that the U.S. side very much needs Taiwan's chip assistance," Liu said.

Although the court invalidated the legal basis for broad tariffs under the U.S. International Emergency Economic Powers Act, the Trump administration has invoked Section 122 of the 1974 U.S. Trade Act to impose a 15 percent global tariff, creating new uncertainty for Taiwan.

Gordon Sun (孫明德), director of TIER's Economic Forecasting Center, said that Section 122 has a five-month limit and a 15 percent ceiling, making it less powerful, and compared with last year's tariff pressure, this year "should be better by comparison," Sun said.

He added that although semiconductors and ICT industries remain vulnerable to possible action under Sections 232 or 301, prior negotiations mean "pressure will only move in a lighter direction."

Sun said the Year of the Horse had started positively, with AI growth spreading to related sectors and wealth effects from the stock market supporting consumption, and that the growth outlook has shifted from approaching 5 percent to between 7 and 8 percent.

Looking ahead to 2026, Sun said continued AI strength and moderate inflation could produce a "Goldilocks economy," meaning "the economy performs very well and prices do not rise."

TIER President Chang Chien-yi (張建一) said the U.S.-Taiwan trade agreement remains valid as "essentially a trade agreement," and that even without a legal basis under the U.S. International Emergency Economic Powers Act, subsequent agreements "can still be established."