Brian Hioeby Brian Hioe
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Photo Credit: Gage Skidmore/Flickr/CC BY-SA 3.0
UNSURPRISINGLY THE TARIFFS that US President Donald Trump has threatened the world with have led to strong reactions in Taiwan. In particular, Trump originally suggested that Taiwan would face 32% tariffs, having previously lashed out at Taiwan for “stealing” the US semiconductor industry and suggesting that Taiwan should pay the US for its defense.
Though Trump seemed to back off from the notion of tariffs on Taiwan’s semiconductor industry and softened his rhetoric after TSMC announced a 100 billion USD investment plan in the US, it was unclear as to whether this would reduce the percentage of tariffs that Taiwan faced. Taiwan may have noted that Taiwan would, under Trump’s original plans, only face 2% less tariffs than China.
Since then, with Trump’s U-turn on tariffs after the announcement of a 90-day suspension of his original plan, Trump has continued with plans to impose tariffs on China. Taiwan will be included in the list of countries that Trump will not impose tariffs on, except for the baseline of 10% imposed on April 9th. The US and China have continued to escalate tariffs, with China now facing 145% tariffs and the US facing 84%.
Some in Taiwan have found this reassuring, in that Trump continues to maintain an antagonistic posture toward China, when many have feared that he might unpredictably trade away Taiwan as part of some grand bargain with Chinese President Xi Jinping. Yet Trump’s continual U-turns show that this could potentially still be on the table.
Although Taiwan has long had rosy views of America–and of the Trump administration–such views are likely to be damaged by Trump’s flip-flops. Namely, Taiwanese society only received a partial, often self-selecting picture of what occurs in American politics. But Trump’s numerous U-turns on tariffs have sent stock markets in Taiwan careening up and down, and so the effects of his actions are felt in Taiwan in a way that may not have previously taken place.
In his announcement of a 90-day suspension on tariffs, Trump emphasized that countries that did not respond with retaliatory tariffs would be “rewarded.” In this sense, President Lai Ching-te’s immediate announcement that Taiwan would not respond to the US by retaliating with its own tariffs was a wise one. Since then, Lai has gone on a charm offensive, publishing an article in Bloomberg about how Taiwan and the US could find economic success by working together.
By contrast, the KMT has seen criticisms over some of the suggestions by pan-Blue politicians as to how to respond to the tariffs. At the official level, both parties have met in order to discuss countermeasures to the rapidly changing world economic situation.
Photo credit: Eric Chu/Facebook
However, US-skeptic views have long since been embraced by deep Blue politicians. KMT legislator Hsu Yu-chen called for the Lai administration to respond with retaliatory tariffs of its own. Deep blue commentator Jaw Shaw-kong, who previously was the KMT’s vice presidential candidate in 2024, suggested suspending TSMC and UMC investments in the US to threaten Trump economically. Jaw also suggested that the US would eventually turn toward positive relations with China, seeing as China is the world’s number two economy, hoping for the return of Chinese tourism to the US.
Of course, as Trump’s subsequent reaction shows, responding to the US with tariffs would have likely invited retaliation on the Lai administration. Otherwise, KMT legislator Luo Chi-chiang was criticized for calling for Trump’s recall on social media, then later deleting this post, perhaps fearing that this would draw American scrutiny or invite ridicule due to Luo not being aware that the US does not have recall powers for presidents the way that Taiwan does. Fellow KMT legislator Hsu Chiao-hsin was similarly criticized for publicizing incorrect numbers for the tariffs to try and trumpet the bad news.
Further criticism has centered around flip-flops by the KMT on the idea of subsidies for industry to alleviate economic shocks from the tariffs. On April 4th, KMT chair Eric Chu and KMT legislative caucus leader Fu Kun-chi attacked the idea of subsidies as wasteful, before Chu later changed his stance to call for 200 billion NT in subsidies for industry on April 8th. Fu, on the other hand, called for 140 billion NT in subsidies that the KMT had previously cut from the budget to be used for industry. The KMT now calls for increases in the government bailout of affected industries, claiming the DPP has not done enough.
Indeed, as efforts at alleviating shocks to industry will require money, the KMT’s cuts to the national budget that resulted in 34% of operational spending being cut earlier this year may see further criticism. Clearly, there is now a pressing need for funds, and though the KMT previously sought to cut the funds in the name of government efficiency–and as a way to sabotage the Lai administration–it does not want to risk public blame now for its obstructionism.
The KMT’s missteps reflect that the party simply lashes out at any and all DPP international trade policy, while seeking to pin all blame on it. One notes that the KMT has also sought to create the narrative that the DPP is to blame for the tariffs to begin with, calling for a cabinet reshuffle to take responsibility for the tariffs. At the same time, one notes that the DPP has sometimes done the same, as in DPP Taipei city councilors criticizing the Chiang mayoral administration for being inadequately prepared for the tariffs. But it seems relatively unlikely that the public will blame the DPP as somehow having invited the tariffs onto Taiwan by mismanaging Taiwan’s relationship with the US, when the tariffs affect the entire world.
Still, the KMT’s consensus seems to have crystallized around the notion of calling for a return to Chinese group tourism to Taiwan as a remedy to the tariff shocks. This would be to frame Chinese tourism as the solution of any and all of Taiwan’s economic woes, though one notes that tourist consumption is likely limited to food, souvenirs, travel destinations, and transportation. This, too, reflects the way in which the KMT has few solutions at present except to lean into calls for ties with China.