Taiwan has announced plans to revise its 2025 economic growth forecast, the first significant move since the imposition of US tariffs on Taiwanese exports.
Revision of Growth Forecast
Following the announcement, the statistics bureau in Taipei pledged to release the updated growth figures soon. After their May prediction of a 3.1% growth rate this year, 22 economists speculated that the actual growth rate could surpass that, reaching 4.1%.
Controversy Surrounding Taiwan's Economic Growth
Recent analyses indicate that the island's economy is experiencing increased demand for its advanced chip exports due to the rising adoption of AI by companies. In anticipation of Trump's tariffs, firms rushed to purchase Taiwanese tech products, which significantly boosted growth, with export revenues hitting $154 billion in the last quarter. Bloomberg economist Hyosung Kwon noted the high risk of declining growth rates due to tariff policies.
Impact of Trump's Tariffs on Taiwan's Economy
Following Trump's announcement of a 20% tariff on Taiwanese exports to the US, tensions among tech companies heightened. The Taipei government assured manufacturers that the tariffs are temporary. However, a more serious threat loomed as Trump announced a possible 100% tariff on semiconductor imports, putting leading firms like Taiwan Semiconductor Manufacturing Company at risk, though it might evade such tariffs due to its US operations.
The revision of Taiwan's growth forecast raises new questions and challenges. Debates about the country's ability to maintain its growth rate and the impact of tariff policies continue.
