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A separate US Section 301 investigation into semiconductor overcapacity poses a bigger source of uncertainty for Taiwan than the latest US tariffs, according to a news story published by Focus Taiwan, which cited economists as saying the outcome of the probe could have a greater impact on the island's technology sector.
The story said the concern comes even as Taiwan views the newly announced US Section 301 tariffs as relatively favourable. The United States has imposed a 10 per cent Section 301 tariff on certain goods from Taiwan as part of measures targeting imports from economies that it says have not adequately enforced bans on goods produced with forced labour. The tariffs are set to take effect on Friday (US time). According to Focus Taiwan, the Taiwan Institute of Economic Research (TIER) said Taiwan's 10 per cent tariff rate compares favourably with the 12.5 per cent duty imposed on several other economies, including Japan and China. The story quoted TIER President Chang Chien-yi as saying Taiwan's comparatively lower tariff rate partly reflects its efforts to address US concerns over forced labour. He added that the new tariff structure could narrow the tariff disadvantage traditionally faced by Taiwanese exporters, particularly in industries such as automobile parts. Focus Taiwan also said that products from Taiwan already subject to a most-favoured-nation (MFN) tariff of 10 per cent or more will not face an additional Section 301 duty. For products with an MFN tariff below 10 per cent, the combined MFN and Section 301 tariff will total 10 per cent. However, TIER economist Liu Pei-chen said a separate US Section 301 investigation into semiconductor overcapacity, expected to conclude by the end of July, remains the bigger concern. According to the story, advanced-node foundries are likely to be less affected, while mature-node foundries could face greater exposure because concerns over excess capacity are concentrated in that segment. The story further quoted Chang as saying Taiwan exports relatively few semiconductors directly to the United States, with many chips shipped to other countries for assembly into information and communications technology products. However, he said the impact could become more significant if Washington were to impose tariffs on finished products containing chips that are not manufactured in the United States. (ANI)
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