Taiwan will help companies relocate production from China given the likely large impact from tariffs that incoming U.S. President Donald Trump has promised to impose on the country, Economy Minister Kuo Jyh-huei said on Thursday.
A threat by Trump, who will take office in January, to impose tariffs of 60% on U.S. imports of Chinese goods poses major growth risks for the world’s second-largest economy.
Taiwanese companies have invested billions of dollars in China over the past four decades, taking advantage of historically lower costs, but Taiwan’s government, wary of stepped up pressure from Beijing to accept Chinese sovereignty claims, has been encouraging its firms to move investment elsewhere.
Speaking in parliament, Kuo said the impact of any Trump tariffs on China for Taiwanese firms manufacturing there would be “quite large”.”We will as soon as possible come up with help for Taiwan companies to move their production bases,” he said, without giving details.
Kuo was also asked by lawmakers about concerns Trump might cancel subsidies for TSMC (2330.TW), opens new tab, the world’s largest contract chipmaker, which is investing $65 billion in the U.S. state of Arizona for new factories.
Kuo said there was a contingency plan, including helping more companies in the supply chain to move to the United States.
“It is a trend for TSMC to keep expanding its investment in the United States,” he said.
TSMC has not commented on concerns it may have about the subsidies. Its Taipei-listed shares closed up 0.5% on Thursday, roughly in line with the broader market, which ended up 0.8% (.TWII), opens new tab.
Taiwan’s GlobalWafers (6488.TWO), opens new tab, investing $4 billion in the United States, told Reuters it expects the Chips and Science Act award aimed at encouraging investment by chipmakers in the United States would continue under the new U.S. administration.
