TAIPEI (TVBS News) — The United States announced Friday (Aug. 1) that Taiwan will face a 20 percent tax rate, exceeding Japan's and South Korea's 15 percent rates. This decision has ignited concerns about Taiwan's industrial competitiveness in global markets. Sun Ming-te (孫明德), director at the Taiwan Institute of Economic Research (TIER, 台經院) Taiwan's leading economic think tank, explained that direct comparisons prove challenging given different export focuses.
Sun noted that Japan and South Korea paid significant prices for their 15 percent tax rates, making Taiwan's current 20 percent rate relatively favorable. He highlighted substantial GDP differences, with Japan at US$4 trillion and South Korea exceeding US$1 trillion, which contributed to lower rates due to their economic impact on America. Sun advised Taiwanese businesses to communicate promptly with clients, adjust strategies, and engage supply chains to manage costs while urging Taiwan's central bank to assist companies through exchange rate policies.
The future tax rate will depend on Taiwan's willingness to make concessions, Sun said, questioning whether Taiwan can mobilize businesses to invest in America like Japan and South Korea. The economist mentioned that Japan and South Korea have opened their markets for years, even allowing American pork, beef, and rice imports. Whether Taiwan will make similar agricultural sacrifices remains uncertain and could determine future trade relationships. ◼