Taipei, April 11 (CNA) The 32 percent import duty U.S. President Donald Trump announced last week for Taiwan is considered “extremely high” by Taiwan’s government, which has proposed a NT$88 billion (US$2.72 billion) support package for the worst-case scenario, Premier Cho Jung-tai (卓榮泰) said Friday.
In a special report presented to lawmakers in Taipei Friday, Cho said Trump’s 32 percent “reciprocal tariffs” announced on April 2 for Taiwan is “extremely high” and would have the most significant impact of the three scenarios for which the government had drafted responses.
The three scenarios are based on the U.S. tariff rates Taiwan could face, and 30 percent or higher is described as “extremely high,” according to Cho.
The “reciprocal tariffs” announced for dozens of countries the U.S. has trade deficit with were scheduled to take effect on Wednesday, but the U.S. president announced a 90-day pause on the new measures, while retaining the 10 percent duties imposed last Saturday on nearly all countries and territories.
The 32 percent tariffs announced for Taiwan is higher than the 24 percent duty set for Japan and the 25 percent levy for South Korea.
At that level, Taiwan is expected to see a drop of at least 21 percent in the value of goods shipped to the United States, as American buyers are expected to see higher pricing of products sent from Taiwan due to the higher costs created by the import duty.
To prevent American clients from placing orders with competitors in other countries, Taiwanese businesses will have to consider moving manufacturing to locations outside Taiwan in order to stay competitive in the global market, Cho said.
The local manufacturing sector is likely to see a 5 percent drop in production value, and 125,000 jobs could be at stake, the premier said.
The agricultural sector will also be hit by the sweeping tariff at 32 percent, because of the added cost of exporting products to the U.S., which are estimated at NT$320 million for orchids, NT$460 million for tilapia, and NT$110 million for mahi mahi, or dolphin fish, Cho said.
Cho made the presentation to obtain lawmakers’ support for the administration’s NT$88 billion proposal aimed at mitigating the impact over a four-year period.
The support plans will be funded through a special budget and therefore require legislative approval.
In the scenario of Taiwan facing “low” U.S. tariff of 10-20 percent, Cho said the impact on local industries are expected to be manageable and the four-year support plan would cost NT$36.1 billion.
The “high” U.S. tariffs at 20-30 percent in the government’s projections show higher risk of impacting certain manufacturing sectors, such as machinery and electronics, as well as exports of agricultural and fishery products, with the cost of the support plans estimated at NT$57.6 billion, according to Cho.
In addition to the proposed plans, Cho said Vice Premier Cheng Li-chiun (鄭麗君) will lead trade negotiations with the U.S. to address Washington’s concerns over trade barriers.
The government will also tackle other trade issues raised by Washington, including export controls on advanced technology and Chinese products “dumped” on the U.S. market through a third country like Taiwan and Vietnam, the premier said.
As the U.S. has imposed “reciprocal tariffs” of 145 percent on China, Cho said the government will also prevent China from “dumping” cheap products in markets outside the U.S., including Taiwan.
