Trump rates wrap political debate in Taiwan

On April 2 – Danald Trump called “Liberation Day” – the US President announced massive tariff increases on almost all American trading partners, including 32 percent rate on Taiwan. The stock markets responded quickly in the run -up to April 9, the date on which Trump’s rates would have come into force. On April 7, shares for the Taiwan Stock Exchange, or Taiex, fell by 9.7 percent, which activated a circuit breaker who stopped the trade temporarily. This was the biggest one -day drop In history for Taiex. Emergency power interrupers were also activated In other Asian markets, such as Japan.

Next days have proven to be comparable in terms of market volatility. Shares arrived when Trump announced a 90-day suspension of rates, whereby Taiwan is included in the list of countries that will see the rates of 10 percent instead of the rates that Trump announced on 2 April. Nevertheless, the Financial Supervision Commission announced that measures to prevent short sale would be stay in place For this week. The margins for short sale were increased from 90 percent to 130 percent, the limit of Intraday sales orders was lowered to 3 percent of 30 percent of the average trade volume shares from the last 30 sessions, and rules for species collateral that can be used to cover margin shortages.

Trump’s original plan for 32 percent Rates for Taiwan were remarkably only 2 points less than China, which were originally confronted with 34 percent in rates. Analysts had expected Trump to play economically in Taiwan, in which Trump had previously accused Taiwan of “To steal” The American semiconductor industry. Taiwan has long been accused of the United States of intentional confronted undervaluation His currency, although Washington has historically seen stopped briefly From the labeling of Taiwan a currency manipulator – probably for political reasons.

Indeed, Trump’s animus against Taiwan has often returned to the issue of semiconductors. When Taiwanese semiconductor production -giant TSMC announced an investment plan of $ 100 billion in March, Trump seemed Change his tune, TSMC CEO CC Wei “Calling one of the most respected people in business”. But mixed signals from the Trump government made it unclear whether semiconductors would be exempt or would be included in rates.

The current signs are that the tariff exemptions of the Trump administration are for electronics Only temporary, Trump said that specific rates would be for semiconductors announced In the following week. Shortly before Trump’s comments, trade secretary Howard Lutnick had proposed a longer period of time and said that rates for semiconductors would be announced within a month or two.

For its part, the Pentagon has emphasized Those military ties with Taiwan will continue, despite the uncertainty about trade. The Ministry of Defense probably hopes to separate the American trade policy from its defense policy, in terms of public perceptions. Yet it will be difficult to avoid a conflation of the two in Taiwan, especially since Trump has suggested in the past that Taiwan should pay the United States for defense. Trump has repeatedly suggested that Taiwan is a freeloader about the American munificence.

It is therefore no surprise that the rates of the Trump government have become an object of domestic political position between the Democratic Progressive Party (DPP) of President Lai Ching-TE and the Kuomintang (KMT). While the rates “Liberation Day” are worldwide and our allies and partners have closed across the board, the KMT initially called on the LAI administration repeat The government to take responsibility for not avoiding the rates. Later, both parties meeting To discuss countermeasures for the rates, but this has not prevented partnership.

After the news about the rates broke out quickly announced That Taiwan would not look for mutual rates. Lai published an on-ed In Bloomberg suggests that Taiwan and the United States could deepen economic relationships to seek joint prosperity.

But this led to criticism from KMT politicians, who said that Lai had adopted a weak attitude. KMT legislator HSU YU-CHEN assertions That Taiwan must respond with rates. Pan-Blue Media commentator JAW Shaw Kong, who was the Vice Presidential Candidate of KMT in 2024, assertions For suspending TSMC and UMC investments in the United States as negotiating tactics. KMT legislator Luo Chi-Chiang went one step further invoke Americans who remember Trump in a social media post that was later removed. Luo may not realize that there is no provision to recall a president in the United States or Taiwan at a time when the KMT is confronted with a wave of recall campaigns.

There has also been back and forth between the pan-blue and pangroen Kampen about the idea of ​​subsidies to illuminate the affected industries. At the beginning of April, KMT chairman Eric Chu and legislative caucus leader Fu Kun-Chi Initially failed About the idea of ​​subsidies for industry. Such a hesitation was probably due to the amount of political capital that was stunned by the KMT earlier this year, whereby the government’s operational budget is drastically reduced in the name of the tax balance. It would be seen as a reversal to immediately ask for bailouts for the industry in response to the rates.

Nevertheless, Chu and Fu have Now shifted to calling For subsidies and in fact criticized the DPP for only approval 88 billion Taiwanese dollars (US $ 2.7 billion) in financing for industrial auxiliary measures. CHU called for NT $ 200 billion, while FU now supports NT $ 140 billion in industry subsidies, which the KMT had previously tried to reduce.

Trump has now withdrawn the rates of the Liberation Day for at least 90 days, instead aimed at an escalating rate war with China. Trump stated that countries that are not trying to take revenge against the United States “Rewarded.” Measures requested by the KMT would probably have led to anger of the Trump administration.

However, some segments of the KMT may hope to undermine Taiwan-US tires in this way, instead looking for a return to economic involvement in China. In response to the rates that have a lot of uncertainty about Taiwan-us relationships, the KMT has returned to Usual canards About Taiwan that needs Chinese tourism, with the argument that Taiwan should try to double economic ties with China. It is likely that as the uncertainty about the actions of the Trump administration continues, the KMT will continue to lean in this story, in accordance with proposals to re -enter The controversial trade agreement for Cross-Strait-Diensten-De Propied Free Trade Agreement with China that fueled the Sunflower Movement of 2014 in the presidential election cycle of 2024.

Broadly speaking, the KMT continues to lean in the American skeptic political stories that started during the first Trump government. Certainly, the uncertainty and unrest of the Trump government offer fruitful ground for American skeptic political stories. But a political strategy to simply get out of all measures proposed by the DPP and the call for the opposite is perhaps not particularly effective step for the KMT. In fact, at a time when the KMT is confronted with an unprecedented wave of recovery campaigns that focus on all KMT laws, this would probably simply give those who are already angry about the actions of the party.