Trump’s Equitable Tariffs Finalized, US Pressure on Taiwan Increases with 20% Tariffs, Urging Urgent Restructuring of Corporate Supply Chains
(Background Summary: The Collective Anxiety of Taiwan Regarding Semiconductor Tariffs: What is the US “Section 232”?)
(Background Supplement: Taiwan’s 20% Tariff > New Taiwan Dollar Drops Below 30, Hitting Two-Month Low; Next Week’s Semiconductor Tariff is the Real Challenge)
US Trade Representative Jamieson Greer confirmed in a CBS “Face the Nation” interview on the 3rd that there is little room for significant adjustments to the “equitable tariffs” signed by President Trump. This policy, which took effect on August 7, imposes a 20% tariff on Taiwanese goods, highlighting the new pressure to reshape the global supply chain.
Tariffs “Almost Finalized”: Negotiation Space Shrinks
During the interview, Greer pointed out that the tariff rates are “basically confirmed” and will not be lowered in the short term.
“Unless countries make specific concessions, the new tariff rates will not change easily.” According to the announced tariffs of various countries, rates in North America, Brazil, and India exceed 25%, while Japan and South Korea are below 19%, reflecting a “high pressure” strategy. In the past, Vietnam managed to reduce a 46% tariff to 20% by making concessions, indicating that the US has normalized the use of tariffs as a negotiation lever.
Taiwan’s 20% Tariff: Pressure Test for Export Industries
Although Taiwan’s tariff rate has been lowered from the original 32%, it remains significantly higher than those of neighboring countries. Export-oriented industries such as electronics manufacturing, machinery, and bicycles will be the first to bear the brunt. Companies’ profit margins may face compression, affecting GDP and capital market trends. The Taiwanese economy still consists mainly of small and medium-sized enterprises focused on contract manufacturing, most of which have profit margins of less than 30%. Coupled with the 20% tariff and exchange rate differences, many small and medium-sized companies are already struggling.
Despite the US’s declaration that a reduction is unlikely, Taiwanese officials still define this as a “temporary tariff” and continue to seek improvements through bilateral negotiations. The content of agreements remains undisclosed during the negotiation period, leaving companies to absorb costs or pass on prices amid tariff uncertainties and business decisions.
Supply Chain Restructuring: Risk Diversification and Upgrade Opportunities
In response to the increased tariff rates, Taiwanese companies are accelerating the “diversification of production bases.” Businesses are adding capacity in Southeast Asia and Mexico or increasing their market share in non-US markets to dilute the impact. At the same time, upgrading from contract manufacturing to brand management, R&D, and high value-added segments has become a necessary long-term strategy for enterprises. Observing the semiconductor industry, the results of the US “Section 232” investigation will influence future conditions for Taiwan’s chip exports and affect the overall supply chain’s location decisions.
The certainty of the Trump administration’s equitable tariffs pushes global trade toward a state of high volatility. For Taiwan, the 20% tariff serves as both pressure and a catalyst for upgrading. Regardless of the negotiation outcomes, the speed at which companies respond to risks and upgrade their value chains will determine whether Taiwan can turn challenges into long-term competitiveness.
