Taiwan is preparing contingency plans in response to the possibility of “reciprocal tariffs” by the US

Taipei: Taiwan is making backup plans in case the US imposes “reciprocal tariffs,” according to Taiwan News. Officials are certain that the trade surplus is due to high demand for Taiwanese technology rather than unfair trade practices.

In order to review Taiwan’s approach before the anticipated tariff announcement on Wednesday, Taiwan President Lai Ching-te called a high-level meeting with top government officials on Sunday evening.

Premier Cho Jung-tai gave Lai and the Taiwan-US trade working group a thorough report at the meeting that highlighted the possible economic effects of certain tariff levels. Lai gave government agencies instructions to help businesses that would be impacted by the tariffs and to look into ways to lessen economic disruptions, according to a statement from the Presidential Office, Taiwan News said.

In an effort to correct what it perceives to be trade imbalances, the Trump administration has declared its intention to put tariffs on the 15 nations that have the biggest trade surpluses with the US. After China, Mexico, Vietnam, Ireland, and Germany, Taiwan now has the sixth-largest surplus. Officials expect Taiwan to be one of the countries targeted by the strategy because of its location.

Over the course of the last two months, the Executive Yuan’s Office of Trade Negotiations has been aggressively planning for this development and has prepared a series of reaction measures to deal with any possible repercussions.

Taiwan has been actively working to reduce its trade surplus with the United States in the meanwhile. These include finding more American products to import in order to balance trade flows and signing a letter of intent to buy liquefied natural gas from Alaska.

Officials have reaffirmed that the United States’ increasing demand for Taiwanese semiconductors and other technological items is the cause of Taiwan’s expanding trade surplus. “It reflects the structural problem of the sharp increase in US demand for Taiwan’s technological products and the expansion of our trade surplus with the United States,” the Central Bank said, according to Taiwan News.

Exports of semiconductors were a major factor in Taiwan’s trade imbalance with the US last year, which increased by 83% to a record NTD 3.69 trillion (USD 111.4 billion).