Ming-Yen Ho and Chiang Min-yen
The decisive Republican victory in the 2024 U.S. election has handed President Donald Trump a full mandate to implement his economic agenda. His plans for punitive global tariffs and extended corporate tax cuts are clear. However, the future of Biden-era policies, such as the CHIPS and Science Act (often shortened to the CHIPS Act) and the Inflation Reduction Act (IRA), remains uncertain.
Taiwanese firms face two key concerns under the second Trump administration. The first is the sustainability of U.S. commitments to support Taiwanese manufacturing under the CHIPS Act and related incentives. Will federal and state-level agreements reached in the Biden era be honored? If new subsidies arise, Taiwanese firms need a level playing field with U.S. competitors. Taiwanese companies must stress their critical role in bolstering the U.S. supply chain – a network vital for allied countries. Favoring U.S. manufacturers alone risks inefficiency, higher costs for U.S. customers, and misallocation of resources essential for competing with China.
The second issue involves potential tariffs and trade barriers targeting Taiwanese semiconductor and electronics supply chains. Trump’s past suggestion that he would use tariffs to coerce investments remains salient. Historical precedent from the Japan-U.S. trade conflict shows this strategy could pressure Taiwanese firms, especially in sectors with U.S. competitors. Preemptive investment in the U.S. may mitigate this risk while expanding business opportunities.
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