A bigger concern for Taiwan than the 10% tariffs imposed by the US is a separate ongoing investigation into semiconductor overcapacity. According to economists, the outcome of this investigation could have a deeper impact on the island’s technology sector, especially mature-node foundries.
New Delhi [भारत]July 24 (ANI): A separate US Section 301 investigation into semiconductor excess capacity is an even bigger source of uncertainty for Taiwan than the recently imposed US tariffs, according to a Focus Taiwan news story. The story quoted economists as saying that the results of this investigation could have a deeper impact on the island’s technology sector.
The story said this concern comes even as Taiwan views the recently announced US Section 301 tariffs as relatively favorable. The United States has imposed a Section 301 tariff of 10 percent on certain goods from Taiwan. It is part of measures targeting imports from economies the US says have not adequately enforced restrictions on goods produced with forced labour. These tariffs are scheduled to take effect from Friday (US time).
Relief to Taiwan on new US tariffs
According to Focus Taiwan, the Taiwan Institute of Economic Research (TIER) said Taiwan’s 10 percent tariff rate is much better than the 12.5 percent tariff imposed on many other economies, including Japan and China. The story quoted TIER President Chang Chien-yee as saying that Taiwan’s comparatively low tariff rate reflects its efforts to address US concerns over forced labor. He said the new tariff structure could reduce the tariff disadvantage traditionally faced by Taiwanese exporters, especially in industries such as automobile parts.
Focus Taiwan also said that Taiwanese products that already face a most-favoured-nation (MFN) tariff of 10 percent or more will not face any additional Section 301 tariffs. For products on which the MFN tariff is less than 10 percent, the total MFN and Section 301 tariff will be 10 percent.
Semiconductor testing becomes a big concern
However, TIER economist Liu Pei-chen said a separate US Section 301 investigation into semiconductor excess capacity, which is expected to conclude by the end of July, remains a major concern. According to Storey, advanced-node foundries are likely to be less affected, while mature-node foundries may face greater risk as concerns over excess capacity are concentrated in this segment.
risk of indirect impact
The story further quotes Chang as saying that Taiwan exports relatively few semiconductors directly to the United States, as many chips are sent to other countries to be assembled into information and communications technology products. However, he said if Washington imposes tariffs on finished products that contain chips that are not made in the United States, the impact could be even more significant. (ANI)
(Except for the headline, this story has not been edited by Asianetnews Editorial staff and is published from a syndicated feed.)