Taiwan think tank sees currency appreciation as way out of Trump tariffs

台灣智庫認為貨幣升值是擺脫川普關稅的途徑

Appreciating New Taiwan dollar will narrow Taiwan's trade surplus


TAIPEI (Taiwan News) – Taiwan needs to consider cutting its trade surplus with the US in order to avoid tariffs from the Trump administration, a prominent think tank said Saturday.

President Donald Trump announced tariffs of 25% for some imports from Canada and Mexico, and of 10% for China, taking effect Saturday. If his administration turned its attention toward Taiwan, the country might have to take recourse to several policy adjustments, per CNA.

Chung-Hua Institution for Economic Research Chair Lien Hsien-ming (連賢明) said that as one of the 10 countries with the largest trade surpluses with the US, Taiwan might have to consider letting its currency appreciate as the most direct way to narrow the surplus. The country’s trade surplus with the US jumped to a record US$64.9 billion (NT$2.13 trillion) for 2024. However, currency appreciation might harm the economy’s already weakened traditional sectors, Lien said.

Tariffs might also force a second adjustment for Taiwan corporations’ supply chains. Many companies already moved from China to Mexico or Southeast Asia, but next they might have to consider transferring the supply chains to the US.

The fact that Trump’s tariffs on Chinese imports were lower than expected was likely to fuel competition between Taiwanese and Chinese exporters, according to Lien. As to semiconductors, the tariffs were less likely to impact the most advanced chips, but Taiwan’s tech sector still needed to pay attention to the likelihood of supply chain adjustments, the senior economist concluded.