Taiwanese stocks are expected to recover following the US announcement of tariff exemptions on smartphones, PCs, servers, and chipmaking equipment.

Analysts see this as a positive for Taiwan’s contract electronics manufacturers.

However, they caution that market uncertainties remain due to possible future tariff changes and ongoing trade negotiations.

“Will the market sustain its rebound, or is this just a short-term reaction? We need further observation,” said senior stock analyst Lu Han-wei.

The TAIEX closed at 19,528.77 points on April 11, marking a weekly loss of 8.31%. The drop came during a volatile period that included intervention by Taiwan’s National Stabilization Fund and a 90-day US tariff pause.

🔗 Source: Taipei Times

🧠 Food for thought

1️⃣ Taiwan’s shifting trade patterns reveal deeper US-China supply chain dynamics

The current tariff exemptions highlight Taiwan’s evolving position in global trade that has been decades in the making.

Taiwan’s economic relationship with the US has transformed dramatically, from receiving 32.3% of Taiwan’s exports in 1990 to just 12.2% by 2015, while China’s share rose from 12.7% to over 40% during roughly the same period 1.

This trade model developed as Taiwanese manufacturers relocated production to China while maintaining headquarters in Taiwan, creating supply chain vulnerabilities that the current tariff situation now exposes.

Recent trade wars have triggered the largest repatriation of Taiwan’s electronics production in history, with companies like Quanta moving server manufacturing for clients like Amazon and Google back to Taiwan to avoid Chinese export tariffs 2.

These structural shifts explain why the US tariff exemptions on electronics products are particularly significant for Taiwan’s markets. They directly benefit the island’s position as both an alternative manufacturing base to China and a critical link in global tech supply chains.

2️⃣ Taiwan consistently emerges as a primary beneficiary during US-China trade tensions

The current market rebound following tariff exemptions continues a pattern where Taiwan gains from US-China trade friction.

During previous trade tensions, Taiwan’s exports to the US increased by 21% in 2019, reaching $40.2 billion in the first nine months of that year, with office machinery and communications equipment driving this growth 3.