Taipei: Taiwan's deputy trade representative Yen Huai-shing announced on Thursday that the impact of a proposed 100 percent U.S. tariff on semiconductor imports remains uncertain, as Washington has yet to conclude its ongoing trade investigation. Yen's remarks were made during a Cabinet press briefing where he highlighted the ambiguity surrounding whether the potential tariff would target only end products or also encompass components and manufacturing equipment used in chip production.

According to Focus Taiwan, U.S. President Donald Trump recently suggested imposing a 100 percent tariff on "all chips and semiconductors" from countries that neither manufacture chips domestically nor plan to do so. However, this statement was not a formal policy announcement, with details still forthcoming. The U.S. Department of Commerce is currently conducting a Section 232 investigation under the Trade Expansion Act of 1962, which could result in import taxes on semiconductors and other technology products.

Yen emphasized that information and communications technology (ICT) products constitute a significant portion of Taiwan's exports to the U.S. and are subject to the ongoing Section 232 investigation. The Ministry of Economic Affairs reports that Taiwan's ICT exports to the U.S. - including graphics cards and servers - represent over 70 percent of total shipments.

Yen's statements came after National Development Council (NDC) head Paul Liu suggested that the proposed tariff plan might have a lesser impact on Taiwanese suppliers than anticipated; however, he did not provide specific evidence. Liu informed lawmakers in Taipei that the development could be beneficial for Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, as it has already established and continues to expand its plant in the U.S.

Liu addressed the potential implications, noting that Taiwan's chip exports to the U.S. amounted to approximately US$7.4 billion in 2024. When excluding shipments from TSMC and other firms with U.S. operations, this figure decreases to under US$6 billion, comprising about 1.12 percent of Taiwan's total exports. He argued that if all competitors face the same tariff rate, the impact on Taiwan's industry might not be as significant as anticipated.

When asked about the possibility of TSMC expanding its U.S. investment from the current US$165 billion to US$300 billion, as Trump seemed to suggest, Liu declined to comment. He noted his position on TSMC's Board of Directors and stated that no such discussions had occurred.