The government indicated consumer sentiment could take a toll on the economy over the rest of the year, saying “rising economic uncertainties and volatility in financial market will affect consumption confidence.”
Taiwanese economic strength, underpinned by global demand for advanced chips critical to the AI boom, is facing a test due to tariffs threatened by US President Donald Trump. During his Liberation Day event on April 2, Trump said he’d hit Taiwanese shipments with duties of 32%, although those were later postponed for 90 days while the two sides negotiate.
Last month, the archipelago’s biggest company, Taiwan Semiconductor Manufacturing Co., said that demand for its goods remains resilient. The main chipmaker for Apple Inc. and Nvidia Corp. later reported revenue jumped 48% in April as electronics firms scrambled to acquire essential components before global tariffs took effect.
Taiwan’s economy faces added uncertainty because the Trump administration is probing the impact that imported chips and related manufacturing equipment have on US national security, a move that could lead to more levies.
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The statistics bureau also said Wednesday that exports are expected to rise 8.99% this year, versus its earlier forecast of 7.08%. Yet it said the figure could fall 3.2% on-year in the second half as the effects of companies’ front-loading to beat any tariffs faded.
The bureau also revised its inflation forecast for the year to 1.88% from 1.94%. Taiwan’s central bank is set to hold its next quarterly meeting June 19.
Recent gains by the Taiwan dollar driven by greenback weakness have caused worries in Taipei about the economy’s heavy reliance on exports.
A stronger Taiwan dollar would hurt Taiwanese exporters because the US dollars they earn from sales abroad would translate into less of the local currency, or they would need to raise their prices overseas and risk denting demand.
