 "Taiwan’s government to help major tech companies like Foxconn to deal with Trump's tariffs")
Taiwan’s government has pledged to assist major companies, including Foxconn, in managing the impact of US President Donald Trump’s newly imposed 25 per cent tariffs on imports from neighbouring countries.
The country’s economic ministry announced plans to support Taiwanese firms with operations in Mexico, helping them shift production lines and investments as necessary. The goal is to mitigate potential supply disruptions while maintaining a strong presence in the US market.
This move comes after Taiwanese companies, including Foxconn, have expanded their manufacturing operations in Mexico to get closer to the US market, reducing costs and boosting efficiency.
Addressing the tariff challenge
The US tariffs on imports from Mexico have raised concerns for Taiwanese tech giants, including Foxconn, which assembles servers and gadgets for many global tech leaders. Many Taiwanese firms, including Foxconn, have manufacturing plants in Mexico, helping to meet the growing demand in the US market while avoiding costly tariffs.
Foxconn, for example, is in the process of building the world’s largest server assembly site in Mexico, showcasing the importance of its operations in the country.
However, the new tariffs have led to financial repercussions for these companies. Foxconn’s shares dropped by 9.2 per cent in Taipei, while Inventec saw an 8.5 per cent decrease, their largest intraday losses since August. Taiwan’s government has now stepped in to provide the necessary support to prevent further setbacks and help the firms adapt.
Taiwan’s investments in Mexico
Taiwan’s economic presence in Mexico is set to expand, with investments reaching $4 billion by 2025. Since 1999, Taiwanese companies have provided employment to around 70,000 people in the country.
These investments are essential for Taiwanese businesses to remain competitive in the North American market. However, with the new tariffs, companies like Foxconn and others are facing additional pressure to reconfigure their production strategies in order to maintain smooth operations while keeping costs down.
Strengthening US-Taiwan business ties
In response to the tariff situation, Taiwan’s Ministry of Economic Affairs has indicated that it will organise delegations to help Taiwanese companies secure support from local governments when they expand investments in the US.
This initiative aims to foster a win-win scenario for both US and Taiwanese supply chains, boosting bilateral trade and ensuring Taiwanese firms continue to thrive despite trade challenges. This strategic move comes as Taiwanese companies increasingly focus on expanding their US operations in light of the changing global trade landscape.
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