Taipei: Taiwan’s economy continued to exhibit signs of resilience with a “yellow-red” light in March, signaling ongoing economic strength. However, the underlying index fell compared to the previous month due to concerns over potential tariff threats, the National Development Council (NDC) reported.

According to Focus Taiwan, data from the NDC showed a decline in the composite index of economic indicators by 3 points from February, reaching 34 in March. This figure remains within the “yellow-red” range of 32-37, indicating a stable economic environment. Despite an export boom driven by inventory accumulation by buyers, worries about tariffs affected stock market investor confidence and the business sentiment of manufacturers.

The March composite index revealed decreases in sub-indexes related to stock price changes, manufacturing sector sales, revenue from retail, wholesale, and food/beverage industries, as well as manufacturers’ business sentiment, each dropping by one point. In contrast, sub-indexes for overtime working hours in industry and service sectors increased by a point, while those for money supply, industrial production, merchandise exports, and machinery and electric equipment imports remained steady.

Additionally, a separate index of leading indicators assessing Taiwan’s economic outlook over the next three to six months showed a decline in March. The leading indicators fell by 0.15 percent from February to 102.14, interrupting a four-month upward trend. Among the seven components of the leading indicators, export orders, money supply, stock price changes, and manufacturers’ business sentiment sub-indexes dropped, while employment, total floor area of new construction projects, and semiconductor equipment imports saw increases.

Chiu Chiu-ying, head of the NDC’s Department of Economic Development, highlighted that the latest “yellow-red” light was influenced by foreign buyers rushing orders ahead of potential tariffs announced by U.S. President Donald Trump. Trump’s announcement on April 2 of “reciprocal” tariffs on countries with significant trade surpluses with the U.S., including Taiwan, which faced a 32 percent import duty, has created caution among Taiwanese companies about their business outlook.

Although the White House introduced a 90-day pause on April 9, applying a 10 percent duty to all countries except China, Taiwan’s economy is expected to leverage advancements in artificial intelligence to boost exports and expand production capacity. Nevertheless, the NDC warned of uncertainties due to U.S. tariff policies, trade tensions between Washington and Beijing, and changes in global monetary policies.

Before the 90-day pause concludes, Chiu noted that overtime working hours might continue to rise as foreign clients accelerate orders to avoid new tariffs. However, Chiu expressed uncertainty about future developments and anticipated challenges for Taiwan’s economy in the latter half of the year.