Taiwan President Lai Ching-te has met with leading figures from the country's technology sector on how to ensure competitiveness after U.S. President Donald Trump announced a 32% tax rate on Taiwan. So far, Washington has exempted Taiwan's most valuable sector, semiconductors, from the tariffs. For more, TaiwanPlus spoke with Hsu Wen-tai, an economist at Academia Sinica.
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00:00Leading Taiwanese tech figures have reportedly advised President Lai Ching-da not to reveal
00:04his hand too early when negotiating with the United States.
00:07A meeting at Lai's official residence included the likes of Acer founder Stan Hsu and reportedly
00:12a senior TSMC executive.
00:15Taiwan's government has been scrambling to respond to U.S. President Donald Trump's 32%
00:20tariff on most of the country's goods, a policy Taiwan says is strongly unreasonable.
00:25The cabinet has also confirmed that Joseph Wu, Taiwan's top security chief, is in Washington,
00:29D.C. for talks through special channels.
00:33Now in light of Trump's sweeping tariffs, the cabinet has also met with the Central
00:37Bank and Finance Ministry to discuss how to safeguard the economy.
00:41It's already announced a 2.6 billion U.S. dollar package to support local firms.
00:46But will this be enough to protect the nation's prosperity?
00:49For more, Joyce Sung spoke with Hsu Wen-hai, an economist at Academia Sinica.
00:54Can you break down for us what kind of position Taiwan is in to negotiate with the Trump administration
01:01on these tariffs?
01:02I mean, I've heard lots of criticisms on our government, because our politics is very divided.
01:08But I have to say that lots of criticisms are actually not fair.
01:12Let's just say the very, very big picture is that you just put Ukraine in the perspective.
01:17What Trump did to Ukraine is ugly.
01:19How?
01:20Because it's like you can totally just like say, OK, if you don't listen to me, right,
01:24I'm going to just pull out all my security support.
01:27The Taiwanese, of course, you know, you kind of wonder, like, what's the morality of this
01:31president?
01:32If your security is very heavily supported by the U.S. and without their help, there's
01:37really like a very dicey situation.
01:40How much bargaining chips do you have?
01:42Right.
01:43Now, of course, people would say that TSMC and the semiconductor sector is our bargaining
01:47chips.
01:48And that is totally agreeable.
01:50And whether it was a mistake to say that the TSMC announced this big investment just
01:56a while ago was a mistake, that is debatable.
01:59The really bargaining chips here is that we are a sovereign country.
02:03For example, number one is that how much you're going to control the or intervene the exchange
02:08rate.
02:09Right.
02:10So that's central bank.
02:11And so that is something that, you know, the U.S. help us to do, but we don't have to do
02:15as they wish or we can don't do as fast as they wish.
02:18And so in this case, it's like this is one of the bargaining chips.
02:22And how urgently should Taiwan be negotiating with the U.S.?
02:26At this point is that this is a very big shock.
02:29The 32 percent is certainly unimaginable.
02:32If it's implemented, it's going to be a very big shock to the economy.
02:35Something that's very important here is that it is a matter of timing that President Lai
02:41should talk to Trump directly.
02:44Even that's going to anger China.
02:45Right.
02:46But I guess, you know, Trump is happy.
02:47I mean, China is not afraid of anyone, not even China.
02:50So if Lai is willing to talk to Trump, right, at a certain point when the government is
02:56ready, then the government should do that.
02:58In the meantime, the cabinet has announced a support package for industrial and agricultural
03:04sectors.
03:05For now, Taiwan's most valuable sector, chips, are exempt from these tariffs.
03:10But for non-chip sectors, what can they do?
03:14So this is very unfair to them.
03:16They are facing a very big obstacle here with the tariffs.
03:22Trump is using their trade deficit, our trade surplus, right, to calculate the tariffs.
03:29But most of this trade surplus is created by the ICT industry and the semiconductors.
03:35So who got hurt the most is those non-chip industries and non-ICT industries.
03:41Number one is that the government has to bring those tariffs down one way or the other.
03:46That's the bottom line.
03:47Second is that, of course, you know, right now the firms understand the risk of exporting
03:52to the U.S.
03:53They will have to look at other markets such as Japan and Europe.
03:57The rest of the world have incentive to collaborate, right?
04:00So you have to really expand their mutual trade other than the U.S.