Taipei: U.S. President Donald Trump's plan to impose tariffs on imported semiconductors and pharmaceuticals has raised concerns in Taiwan's drug sector, industry insiders said on Saturday. Chen Wei-jen, founding chairman of the Taiwan Functional Food Industry Association, highlighted the potential impact on local manufacturers, particularly those relying on outsourcing work.
According to Focus Taiwan, Chen stated that the core issue revolves around Taiwan's high import tariff rates on health supplements, currently at 30 percent. There have been discussions about reducing these rates to 20 percent over the next five years. Chen cautioned that while reducing tariffs might seem beneficial, it could lead to a decrease in foreign demand for Taiwan's outsourcing services, negatively affecting local production.
Chen further explained that during the COVID-19 pandemic, global supply chain disruptions prompted many developed countries to commission Taiwanese manufacturers to produce health supplements. However, with a potential reduction in Taiwan's tariffs and the global supply chain's recovery, foreign companies might shift their outsourcing to countries with even lower costs, thereby undermining Taiwan's competitive advantage in the health supplement sector.
An anonymous senior representative from Taiwan's pharmaceutical industry added that the direct impact of Trump's proposed tariffs on the drug manufacturing sector would likely be minimal. Only about 10 percent of Taiwan's pharmaceutical exports are directed to the U.S. market, suggesting limited exposure to the proposed changes.