Taiwan's Auto Industry Defensive, Discusses Tariff Reductions on US Cars

Taiwan's Ministry of Economic Affairs convened a symposium on Tuesday with domestic automakers and the Taiwan Transportation Vehicle Manufacturers Association (TTVMA) to discuss the impact of potential tariff reductions on U.S.-imported cars, a key component of ongoing Taiwan-U.S. trade negotiations.

Minister of Economic Affairs Kung Ming-hsin (龔明鑫) announced that the government has earmarked 30 billion New Taiwan dollars (US$950 million) to cushion the automobile industry against the anticipated changes.Kung stated that initial assessments indicate the impact on domestic industrial output could exceed 1%, but remains "manageable."

The funding will be dedicated to helping the automobile and auto parts industry absorb shocks, as well as strengthening independent research and development, Kung said.

Representatives from the TTVMA expressed understanding of the government's market liberalization goals but urged authorities to implement comprehensive supporting measures.They emphasized that the automotive industry is a crucial foundation for domestic heavy industry and job creation, supporting more than 2,700 parts suppliers and approximately 300,000 households across Taiwan. （Related： LDP Wins Super Majority in Japanese Legislature, Central Bank Considers Raising Rates ｜ Latest ）

The association argued that local manufacturing capabilities provide critical support for national defense and transportation systems, enabling the island to "produce cars in peacetime and maintain supply chains in crisis."

The 'Mobile AI' Era

The TTVMA also highlighted the intersection of the automotive industry and artificial intelligence, stating that "future cars will be mobile AI."

Representatives argued that Taiwan's global advantages in information and communication technology (ICT) and semiconductors position local vehicle production as an optimal testing ground for automotive chips, advanced driver assistance systems, and AI computing applications.

By protecting local manufacturing foundations, the association believes Taiwan can integrate into the global smart mobility value chain. If trade liberalization proceeds alongside smart transformation, Taiwan has the opportunity to evolve its automotive industry into a "smart mobility hub," integrating ICT and AI technologies.

Proposals for Industry Stability

TTVMA Chairman Li Chien-hui (李建輝) stated that the industry hopes the government will stabilize employment and ensure domestic producers retain technological autonomy. （Related： LDP Wins Super Majority in Japanese Legislature, Central Bank Considers Raising Rates ｜ Latest ）

Facing tariff restructuring and market changes, the association proposed several specific supporting measures to reconcile market opening with industry resilience, such as creating a fund to encourage investment in automated production lines and advanced automotive electronics R&D.

The TTVMA also called for the launch of talent programs to develop expertise in new energy and autonomous driving technology, while providing wage subsidies and career counseling for affected workers.

The organization also proposed promoting cross-industry cooperation in electronics, batteries, and communications to build a complete automotive ecosystem and enhance international competitiveness.

The industry requested that tariffs be reduced to 0% on components not produced in Taiwan. They also advocated for offering tax incentives, such as commodity tax and corporate income tax reductions, to automakers with high local content ratios.

The TTVMA concluded by emphasizing that Taiwan's automotive industry is facing a critical moment of global competition.

"Market opening should not be an end, but the beginning of upgrading," the association stated, urging cooperation between the government and businesses to protect local industry value and ensure "Made in Taiwan" continues to play a role in the global smart mobility revolution. （Related： LDP Wins Super Majority in Japanese Legislature, Central Bank Considers Raising Rates ｜ Latest ）

Original Article in Chinese