Taipei: The only way to deal with tariffs imposed by the "unpredictable" U.S. President Donald Trump is to talk reasonably with him, the governor of Taiwan's central bank said Thursday. Hours after the so-called "reciprocal" tariffs went into effect Wednesday, Trump announced a 90-day pause but maintained a universal tariff baseline of 10 percent for most countries, with an exception for China where the tariff was increased to 125 percent.
According to Focus Taiwan, Governor Yang Chin-long addressed a legislative committee on the economic impact of Trump's tariffs and Taiwan's response measures. He suggested that Trump's policy reversal may have been prompted by a significant drop in U.S. stock markets following the tariff implementation. The temporary pause announced by Trump led to a surge in U.S. markets, with Taiwan shares also rising by over 1,600 points on Thursday.
During the legislative session, Kuomintang Legislator Lin Te-fu questioned whether the U.S. was exploiting Taiwan, despite it being part of the 90-day pause list, due to a 32 percent tariff imposed on Taiwanese imports. In response, Yang described the U.S. tariff calculation formula as unreasonable, emphasizing that it targets all countries globally, not just Taiwan.
Yang noted that Trump's tariffs did not consider Taiwan's trade surplus with the U.S., which he attributed to the U.S. demand for Taiwanese products. He emphasized Taiwan's contributions to U.S. productivity and economy.
Yang advocated for global discussions with the U.S. on reciprocal tariffs to achieve effective reciprocity. He stressed the importance of reasonable dialogue with the U.S., given the high uncertainty affecting Taiwan's financial markets, to stabilize Taiwan's equity market.
Yang also considered the legislative suggestion of using Taiwan's U.S. Treasury securities holdings as leverage in negotiations with the U.S. He explained that Taiwan's long-term holding of U.S. Treasuries aids in lowering U.S. financial costs, which could be beneficial in negotiations.
On the possibility of Taiwan's Taiex index entering a bear market due to Trump's tariffs policy, Yang acknowledged the high current market uncertainty. However, Financial Supervisory Commission Chairman Peng Jin-lung reassured that the market has not entered a bear market and faces no systemic risk.
Finance Minister Chuang Tsui-yun discussed the ministry's assessment of potentially increasing the NT$500 billion authorized amount in the National Financial Stabilization Fund to intervene in the stock market and mitigate volatility.
Economics Minister Kuo Jyh-huei announced plans to declare bailouts for businesses affected by the new U.S. tariffs on April 14.