Taiwan Cuts 2025 GDP Growth Forecast Amid Trump Tariff Concerns
Taiwan’s trade-reliant economy is expected to grow slower than previously forecast in 2025, with U.S. tariffs and budget cuts imposed by Congress likely to disrupt it.
Taiwan is a key link in the global technology supply chain for companies such as Apple Inc (AAPL.O) and Nvidia Corp (NVDA.O). It is home to Taiwan Semiconductor Manufacturing Co. (TSMC) (2330.TW), the world’s largest contract chipmaker.
U.S. President Donald Trump has proposed a 25% tariff on chips. Taiwan has responded diplomatically to the tariff threat and plans to discuss chip investments in the United States.
The United States is Taiwan’s second-largest export destination after China. A statement from the General Administration of Budget, Accounting, and Statistics on Wednesday said the broad tariffs announced by the Trump administration “affected global trade momentum, increased inflationary pressures, and heightened economic uncertainty.”
Taiwan could be affected because its exports will be affected by potential tariffs in the third or fourth quarter, the statistics agency added. The agency said it expects Taiwan’s GDP to grow 3.14% this year from last year, down from a November forecast of 3.29%. That would be lower than the 4.59% growth rate in 2024.
Budget cuts imposed by Taiwan’s opposition-dominated parliament will also weaken economic growth this year, the agency said, as they mean less investment and government spending. However, the agency said it expects exports to grow 7.08% this year, up from a previous forecast of 5.98%.
The statistics agency slightly raised its 2025 consumer price index forecast to 1.94% from 1.93%. The government said the economy grew 2.9% year-on-year in the fourth quarter, up from an initial estimate of 1.84%.
