Taiwan's stock market sees a slight rise ahead of U.S. President Donald Trump's "Liberation Day" tariff announcement, while markets in Asia continued to slide over the uncertainty. TaiwanPlus breaks down what we know so far about Trump's tariff policy with insights from Riley Walters, a senior fellow at the Hudson Institute.
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00:00U.S. President Donald Trump's so-called liberation day is hours away, a day when he has pledged
00:06to reveal sweeping global tariffs.
00:09Some markets have already been falling because of the uncertainty.
00:14A slight rise in Taiwan's markets in the final hours ahead of U.S. President Donald Trump's
00:20announcement of fresh, long-threatened tariffs.
00:23It's an exception, as other stocks in Asia continue to slide over fears the U.S. policy
00:29could plunge the economy into a downturn.
00:33Taking a longer view, Taiwan's most valuable stock, chipmaker TSMC, has fallen almost 16
00:40percent since Trump took office in January.
00:46Trump is set to make what he says will be his biggest trade move yet, this time reciprocal
00:52tariffs, a sort of tax price match expected to apply to all countries.
00:58As foreseen to be hit the hardest, a group of nations Treasury Secretary Scott Besant
01:03has dubbed the dirty 15, a list believed to be of countries with the biggest trade imbalances
01:10with the U.S., which would include Taiwan.
01:13Without more details, Taipei says it cannot be sure it will get hit with the levies, but
01:19it's devised a working group of officials to prepare for the worst.
01:28Since taking office two months ago, Trump has already imposed tariffs on critical metals,
01:47a blanket tariff on all Chinese shipments, and goods from Canada and Mexico not covered
01:53by a 2020 deal.
01:55Just last week, Trump added a tariff on all foreign cars and related parts.
02:00As for what's to come?
02:03If it's simply reciprocal, maybe the response won't be so bad.
02:07If it's a blanket across the board tariff announcement where every country, regardless
02:13of whether you're a partner, an ally or a free trade partner of the United States, if
02:19everyone's getting 20 percent, then that's really complicated for everyone.
02:25Trump has said the goal is to revive American production and stop other countries from,
02:31quote, ripping off the United States.
02:33Take a look at trade with Asia, I wouldn't say anybody has treated us fairly or nicely.
02:40Recently, Washington has kept Taiwan on its foreign trade barriers list, highlighting
02:46blocks to U.S. meat and cars into the country.
02:50On top of that, Trump has also long threatened separate tariffs on imported chips, Taiwan's
02:56most valuable sector, a tax that would go beyond simply reciprocating tariffs.
03:03Taiwan does have some high tariff rates, actually some very high tariff rates on particularly
03:09agriculture products.
03:11And you have products like, you know, semiconductors and a lot of ICT products which essentially
03:18go tariff free these days.
03:20It's already one of the most free trade, fair trade industries in the world.
03:27And so they're about to get hit with a very unfair tax.
03:32As Taiwan braces for Trump's announcement, other countries are already standing ready
03:37to respond, Europe saying it will take strong measures if it must.
03:43But for now, all there is to do is wait and see what the U.S. president has in store.
03:49Justin Wu and Joyce Sun for Taiwan Plus.
03:53Some economists are already warning U.S. tariffs could damage global trade.
03:58For more on what this can mean for markets in Asia, earlier I spoke more with Riley Walters,
04:03who you just heard from.
04:04Riley Walters is a senior fellow at the Hudson Institute in Washington, D.C.
04:09Of course, a lot of speculation as to what exactly Trump's tariffs will be.
04:14He's also called out trade with Asia, saying it's not done fairly.
04:19How are you expecting U.S. allies and partners in this region to respond?
04:24I suspect that a lot of people might wait and see for perhaps the Canadian-Mexico response,
04:33perhaps the European response, which is probably going to be a little bit more hawkish.
04:39Countries like Japan and South Korea and Taiwan, I don't think they're going to necessarily
04:43want to get ahead of these other countries with announcements of reciprocal tariffs if
04:50they want to hit back.
04:51I think some countries do want to reduce their tariffs.
04:53They do want to have a good working relationship with this administration.
04:57India, for example, has announced it will reduce its tariffs.
05:01The problem is, are they going to get an exemption tomorrow or not?
05:05I'm skeptical.
05:07And this really then pulls in the question, why should we even negotiate then if we're
05:13going to get tariffs anyway?
05:15For Taiwan specifically, what do you think Taipei needs to be prepared to do in response
05:21to these tariffs?
05:22It really is much more difficult for an economy, for a government like Taiwan, because it's
05:29two main trade and economic partners are really the US and China.
05:34Domestic competition in China is just unfair to foreign enterprise, and that includes Taiwanese
05:41companies now.
05:42Then what do you do with the United States when you have a government that is less interested
05:48in bringing in foreign trade?
05:50They want foreign investment, sure, TSMC, great, MediaTek, great.
05:57What about the hundreds of other small and medium enterprises that simply cannot put
06:02that kind of manufacturing or investment into the United States?
06:06Really what the government in Taiwan is going to have to start preparing for is a lot of
06:12domestic challenges, which come from their companies losing the ability or losing profits
06:19from reduction of exports to the United States.