The Taiwan Institute of Economic Research (TIER) released its latest economic growth forecast on Friday, projecting Taiwan’s GDP to grow by 2.91% in 2025, a downward revision of 0.51 percentage points from its January estimate.
TIER noted that although U.S. tariff policies remain volatile, Taiwan’s economy has benefited from strong AI-driven demand. Additionally, clients have accelerated shipments in anticipation of potential U.S. tariff changes, leading to notable month-on-month growth in production and export orders in March. The proportion of manufacturers with a positive outlook also rose significantly.
TIER Economic Forecast Director Sun Ming-Te (孫明德) cautioned that, based on past U.S. presidential economic policies, tariff wars are often accompanied by currency wars, particularly targeting countries such as Japan, Taiwan, Vietnam, and Thailand.
Sun added that currency devaluation and appreciation create price gaps that impact competitiveness. He warned that if a 10% tariff were compounded by a 10% appreciation of the New Taiwan dollar, manufacturers would effectively face a 20% increase in costs.
However, Sun also noted that the United States may not be overly harsh toward South Korea and Taiwan, while also stressing the importance of being mentally prepared for a potential currency war.