Trump administration hits Taiwan with a 32% tariff

One of the missing stories is not the tarrifs on China but China has been opening factories in Vietnam to get around with tarrifs and now those companies that did that just got fucked.

I have a feeling Vietnamese businesses will put a lot of pressure on the government to negociate. They got hit hard. I suspect they will lower their tarrifs on US goods and agree to buy more US goods. They did everything the US asked to shed the label of being a currency manipulator.

2 Likes

There are fair trade certified factories.

1 Like

You know, an esteemed user here already tried to make this point, but was reminded that the (liberally) estimated 30 billion dollars of exports you are referencing (that’s like ~10% of an Elon Musk for context) is less than 1% of China’s ~3.5 trillion in total exports.

So, let’s say it together: little numbers, little story. :violin:

Should you perhaps cast your eyes to the marginally (lol) more pressing tragedy of the US stock market suffering a multi TRILLION dollar wipe?

Maybe explore the story detailing how Trump is wiring a geopolitical timebomb that will ultimately benefit US adversaries as the US has now positioned itself to try to take an aggressive shit on multiple countries at once, including traditional allies? Hard to believe this bombshell, but: they don’t like it. :scream:

Trump is “negotiating” as much as a mafia boss setting protection fees, which he has said before himself. He insists the other countries are “taking advantage of the US” and that is why he’s setting the glorious liberation day.

The fun thing is, like in my country of origin, we have treaties that state as laws we can only buy certain items - like farm equipment - from the US. We can only solve trade disputes in US courts - hence our banana workers lose all compensation for fatal injuries on the job and aftereffects of chemical use. We are bound to allow US military in our soil to wage war against drugs. As examples.

So there is retaliation now that commerce with China has exceeded US expectations. As a result, there is political retaliation like visa denials if the government chooses Chinese goods but at least we were only stuck with 10 percent tariffs.

Of course our politicians are corrupt and I would not be surprised if they took red envelopes for trade deals with China but when it comes to US the rules are clear: we can only buy from the US, US companies can do as they please in our land and such has been since the banana company days.

If it’s not 32%, does anyone actually know what Taiwan’s aggregate trade barrier to the import of US products is?

Maybe finding out what it is is a better starting point than arguing over whether it’s right or wrong.

Taipei, April 3 (CNA) The Taiwanese government needs to review its existing import duties on U.S. goods and practices to seek to remove the trade barriers that led to the high reciprocal tariff U.S. President Donald Trump slapped on the country, economists said.

In particular, the government needs to study a report recently published by the United States Trade Representative, which highlighted issues involving cars, as well as U.S. beef and pork products, Dachrahn Wu (吳大任), a professor at National Central University’s Department of Economics, told CNA Thursday. . . . In February, the U.S. for the first time in 24 years, became the top export destination of goods from Taiwan, accounting for 28.5 percent of total outbound sales, followed by China and Hong Kong (28.4 percent), Ministry of Finance data showed.

1 Like

During Trump’s first term my old Taiwan company and others were pushed by US customers to diversify from China…so more investment headed to Vietnam and even Taiwan. Well, where to go now but to the U.S.? But the key point is the supply chain. Thousands of companies in the IT supply chain for components to assemble new products and for components to repair old products. At my old company each assembly plant has a very detailed supply chain system…with percentages of incoming components available within 2 hours, 2 days, and 2 weeks. That is the lifeblood of any assembly plant.

Taiwan computer assembly plants run on low profit margins. I can’t imagine how a Taiwan notebook assembly, for example, can invest in the U.S. and arrange the import of thousands of components from overseas and pay import fees…and possibly dream of being profitable unless U.S. customers can accept huge price increases. That seems laughable considering the U.S. customers used to expect quarterly price decreases from Taiwan companies.
I think the only possible salvation for Taiwan companies is Mexico. If Trump would avoid constant shifting on tariff for Mexico that might allow Taiwan companies to increase their presence there. A long time ago, when in Mexico plant I heard the plant manager talk about a customer wanting to shift assembly to the U.S. instead. The plant manager told him the U.S. salary per hour was $8.50/hour and in Mexico as $8/day. Could they afford the price increase for 1000 staff in the U.S.? Of course, the answer was no.

China has also been increasing in investment in Mexico. My opinion is that without Mexico being a feasible investment place for exporting to the U.S. then Taiwan is in big trouble…but then again everyone is in trouble.

2 Likes

Can any worker anywhere live a decent life on $8/day?

Transportation done by company. Meals at factory were free. I do not know current wages…that was around 2005. The industrial zone in Mexico is booming…the wages must be higher by now.

This is great parental advice. Do whatever the toddler says.

Ian Bremmer observes that Americans have voted for Brexit, but on a global scale. After all, they handed the DJT team (such as it is) control of the presidency, the Senate, and the House. And here we are.

Guy

1 Like

And ran a fraudulant university. And sexually assaulted women. And was convicted of multiple felonies.

Sometimes you get what you paid for.

Guy

5 Likes

I’m a Taiwan exporter and it’s been clear to me for a long time Taiwan’s trade barriers on US products are a relic of an earlier time when Taiwan’s industries were starting up and needed sheltering. Times are different now though and it’s in everyone’s best long-term interests for trade barriers to be re-evaluated and lowered across the board.

1 Like

Am I supposed to write you a report on everything? Not sure why you’re taking this tone with me.

I’ve been talking about the areas I understand from my own experiences.

2 Likes

I know the Taiwanese government won’t do this, and it wouldn’t help the relationship between Taiwan and the U.S., but what if Taiwan actually flexed its power for once and said we’re going to charge an additional premium on all semiconductors coming from Taiwan going to the U.S.?

Trump obviously realizes the sensitivity and control Taiwan has since he didn’t put a tariff on semiconductors from Taiwan (yet). I feel like Taiwan has a lot more leverage in this “negotiation” than Trump has, but they’re too afraid to use it.

With China doing another military drill around Taiwan…?

Trying to put pressure on Trump has a high risk of backfiring: Right now, there is strategic ambiguity whether the US will support Taiwan or not in the event of an attack. If Taiwan acts too bold, Trump might just end this ambiguity.

So I can understand why they react the way they’re reacting…

2 Likes

Yup. Taiwan could play hardball and put a 30% export tariff on microchips but they realize that trump knows they need US support so they won’t do that. Not that I think he would support them anyway but he keeps it very ambiguous.

Bremmer is more reliable than Peter Zeihan, that’s for sure.

Trump has popular support for deportations, however cruel.

But a lot of Trump voters are getting buyer’s remorse over his adventurism.

The only problem with that is the political reaction and public response -fueled by party controlled media from both sides.

The rice farmers protests, the US pork debacle, etc. one more time…

I worry about all the banned substances and chemicals in US food. Taiwanese already buy enough Teslas. As to B2 to B2, well, that’s more complicated.

Anyways, yes, the government here is flexible and conciliatory. Before Trump, there was talk of getting rid of double taxation and a sort of free trade agreement. Negotiations and accords were moving briskly.

Have you been to a farm in Taiwan? :taiwan:

2 Likes

Maybe the incredibly unfair import tariff on large bikes will come down soon. How much is that tax on imported red plate bikes? How much are those Amazon tariffs?

Good job on this issue Trump.

1 Like