Premier Cho Jung-tai warned of potential turbulence in the Taiwan stock market following U.S. President Donald Trump’s tariff announcement. The local stock market is preparing to face challenges as a result of the “Liberation Day” tariff set by Trump, impacting Taiwanese exporters in the global supply chain.
During a news conference in Taipei, Cho emphasized the need for readiness as the market reopens after the tariff announcement. The Cabinet revealed plans to support Taiwanese exporters amidst the uncertainty caused by the reciprocal tariff introduced by Trump.
Taiwan’s central bank and the Financial Supervisory Commission are closely monitoring foreign exchange rates, particularly in light of Trump’s considerations about currency manipulation. With Taiwan facing a 32 percent tariff, the government is engaging in discussions with businesses to formulate comprehensive responses and manage the situation effectively.
Prior to the tariff announcement, Taiwan’s stock market closed without significant changes, but the impending challenges have raised concerns. While Taiwan observed holidays, U.S. stocks experienced a significant decline, with the S&P 500 marking its worst performance since the 2020 economic downturn due to the pandemic.
The Dow Jones Industrial Average and the Nasdaq composite also saw declines, impacting companies like Taiwan Semiconductor Manufacturing Co. (TSMC), whose ADRs listed on the NYSE dropped over 7 percent. TSMC, with a weight of over 35.67 percent on the Taiex, plays a crucial role in the market’s performance.
As the government aims to provide reassurance to the public, Premier Cho stressed the importance of being prepared for potential market shocks. With uncertainties looming, the government’s proactive stance and engagement with businesses are crucial in navigating the challenges presented by the tariff announcement.
As global trade dynamics continue to evolve, Taiwan’s stock market remains susceptible to external factors, requiring swift responses and strategic planning to mitigate risks and ensure stability. The interconnectedness of markets underscores the need for proactive measures and collaboration between government and industry stakeholders to navigate uncertainties and safeguard Taiwan’s economic interests.
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