Taipei: Taiwan Sugar Corp. (Taisugar) has agreed to provide Taiwanese orchid businesses access to its production base in California, United States, Agriculture Minister Chen Junne-jih announced. This arrangement comes in response to a recent U.S. baseline tariff of 20 percent on Taiwanese goods, which has impacted Taiwan’s orchid industry since its implementation on August 7.

According to Focus Taiwan, the Ministry of Agriculture (MOA) will evaluate the need for equipment upgrades at Taisugar’s facility and determine the rental fees. Minister Chen shared these details during a Forestry and Nature Conservation Agency (FANCA) press conference. Tseng Chun-pi, secretary general of the Taiwan Orchid Growers Association (TOGA), explained that shipping challenges since the COVID-19 pandemic have affected seedling quality. He noted that Taisugar’s California site is ideal for establishing a local production base.

Tseng highlighted that while large seedlings are still subject to the 20 percent tariff when exported to the U.S., local production could control defect rates by cultivating seedlings to the near-blooming stage. This approach is expected to improve yields and customer satisfaction, with customers willing to pay higher prices for better quality.

According to Tseng, Taiwan exports approximately 23 million orchid seedlings to the U.S. annually, with over 90 percent being phalaenopsis orchids. The California site is expected to accommodate about 5 million seedlings. The MOA revealed that 40 percent of Taiwan’s flower exports are directed to the U.S., the largest market for phalaenopsis orchids.

TOGA noted that the U.S. tariff on Taiwanese goods increased from zero to 10 percent in April, causing a 15 percent drop in orchid orders between April and June. A further decline in orders is anticipated following the 20 percent tariff implemented on August 7.