Taipei: The Taiwan Institute of Economic Research (TIER) recently expressed optimism regarding the impact of changes in U.S. tariff policies on Taiwan's economy, especially highlighting Taiwan's pivotal role in the global semiconductor supply chain.

According to Focus Taiwan, TIER researcher Liu Pei-chen referenced a New York Times report indicating that previous U.S. efforts to reduce dependence on Taiwanese semiconductors have seen "limited results." Following a U.S. Supreme Court ruling that deemed reciprocal tariffs unconstitutional, former U.S. President Donald Trump underscored the necessity of Taiwan's chip industry for the U.S., further emphasizing Taiwan's significance.

The court's decision to invalidate the broad tariff powers under the U.S. International Emergency Economic Powers Act led the Trump administration to invoke Section 122 of the 1974 U.S. Trade Act, imposing a 15 percent global tariff. This move has introduced new uncertainties for Taiwan, although Section 122's limitations-a five-month duration and a 15 percent cap-render it less impactful compared to previous tariffs.

Gordon Sun, director of TIER's Economic Forecasting Center, noted that despite potential vulnerabilities in the semiconductor and ICT sectors under Sections 232 or 301, earlier negotiations suggest a reduction in economic pressure. Sun also highlighted a positive start to the Year of the Horse, citing AI sector growth and stock market wealth effects as supporting factors for consumption, with economic growth projections now between 7 and 8 percent.

Looking forward to 2026, Sun anticipates a "Goldilocks economy," characterized by robust economic performance and stable prices, driven by sustained AI growth and moderate inflation. TIER President Chang Chien-yi affirmed the validity of the U.S.-Taiwan trade agreement, describing it as "essentially a trade agreement" that remains viable even without the previous legal framework, allowing for future agreements to be forged.