The government has announced an NT$88 billion (US$2.6 billion) special budget to help local industries manage the impact of new U.S. reciprocal tariffs, which officially took effect on Wednesday. Economic Minister J.W. Kuo (郭智輝) says the budget is focused on supporting industries under the greatest pressure and may be increased if trade negotiations with the United States do not proceed as expected.
Kuo said in a legislative meeting that traditional industries and small to medium-sized enterprises (SMEs) are likely to be hit hardest by the 32% tariffs, while high-tech sectors such as electronics and servers may be less affected. Kuo used an example of Taiwanese server manufacturers, many of which operate under an Original Equipment Manufacturing (OEM) model, meaning their U.S. clients – not the manufacturers themselves – are responsible for paying the tariff.
When asked about the potential impact on Taiwan’s top 30 export products, Kuo acknowledged that high tariffs would inevitably have some negative effects. Lawmakers also voiced concern over those potential impacts on Taiwan’s major exports and whether banks might tighten lending. Kuo reassured that banks have been instructed not to tighten credit lines during this period.
The Labor Ministry is also preparing additional support. Four existing job protection measures are already in place with a NT$15 billion (US$454 million) budget. Labor Minister Hung Sun-han (洪申翰) says a new, tariff-focused version is in development, which may include increased funding and more targeted support. Hung says subsidies will come with conditions, including maintaining legal labor practices and avoiding layoffs.
U.S. President Donald Trump has remarked that 66 countries are negotiating with the United States and suggested that Taiwan should be a top priority in those talks. Minister Kuo says the government’s current focus is on how to absorb or shift impacts through strategic negotiations. He adds that the Economic Ministry continues to meet with domestic firms to gather information on the impacts to support negotiations.