Taiwan Stocks Sink Nearly 10% After US Tariffs Announcement
The Taiwan stock market suffered a sharp drop on Monday, falling nearly 10% in its first session since the US introduced new import tariffs. The market reacted strongly to the news, marking its worst one-day loss in over three decades.
Tariffs Target Trade Surplus of Taiwan
The United States imposed a 32% tariff on imports from Taiwan, citing its high trade surplus with the US. Former President Donald Trump singled out Taiwan, alongside other key trading partners, in the announcement last week.
Following a two-day market break, Taiwan’s main stock index, .TWII, tumbled to its lowest point in more than a year. According to LSEG data, the plunge was the steepest single-day percentage decline since at least 1990.
Despite the blow, Taiwan President Lai Ching-te pledged closer economic ties with the US. In a post on X, he stated his goal of achieving a “golden age” of shared prosperity. He also confirmed Taiwan would not impose retaliatory tariffs. Instead, Lai suggested talks for a bilateral zero-tariff regime.
Government Responds With Support and Stabilisation Measures
To soften the impact of the tariffs, Taiwan unveiled a T$88 billion ($2.65 billion) support package on Friday. This aid is intended to help affected companies adjust to the new trade environment.
Lai also announced plans to boost imports from and investments in the US, reinforcing Taiwan’s long-standing interest in a free trade agreement.
The tariffs did not directly target semiconductors, Taiwan’s main export. However, the economy’s deep ties to the global electronics supply chain—spanning smartphones to vehicles—make it highly sensitive to trade disruptions.
Major tech stocks were hit hard. Shares in chip giant TSMC and electronics maker Foxconn both dropped nearly 10%, triggering automatic trading halts.
Market Confidence Shaken
Analysts pointed to investor panic as the main driver of the sell-off. Venson Tsai of Cathay Futures noted the intense selling pressure and concerns over market confidence.
In response, Taiwan’s financial authorities announced a one-week ban on short-selling to help reduce volatility. Taiwan Stock Exchange Chairman Sherman Lin said further stabilisation steps would be considered, depending on how the market performs.
Lin acknowledged the challenges posed by the tariffs but urged investors to trust in the resilience of Taiwan’s companies and its government.
Still, some remain cautious. Allen Huang from Mega Financial warned that the chance of a recession now exceeds 50% if conditions worsen. Meanwhile, Goldman Sachs downgraded Taiwan to “underweight” in its Asian market outlook, citing the country’s exposure to US trade and market risks.
with inputs from Reuters