Recently, President Trump signed an order to impose a 10% tariff on Chinese goods. During a Lunar New Year gathering in Taiwan, some Taiwanese business representatives disclosed that at least two Taiwanese companies listed on the stock market in China are considering partially moving their production out of China.
After the end of the Chinese New Year holiday, Taiwaneses Association held a Chinese-Taiwanese business Spring Festival event during their first day of work in 2025. Wang En-guo, Honorary President of the Nanchang Taiwanese Business Association and adviser to the Taiwan Foundation, mentioned in a media interview that the future of cross-strait relations depends on the strategic competition between the U.S. and China. Actions taken by the U.S., such as imposing a 10% tariff on China along with the chip ban, make it difficult for cross-strait relations to return to the warm scenario of 2008-2016.
When asked by reporters whether the 10% tariff imposed by the U.S. on China would trigger a new wave of Taiwanese businesses leaving, Wang En-guo, who is familiar with the electronics industry, stated that, to his knowledge, at least two Taiwanese listed companies are planning to partially relocate out of China, specifically in southern Chinese cities.
Wang En-guo said, “Currently, with the additional 10% tariff on top of the existing 25%, the total tax rate is now 35%. I believe it is likely to increase in the future. I have met some Taiwanese business friends who are indeed planning to partially move their production bases out of China.”
As for whether the affected supply chains will move to the U.S. or to nearby Southeast Asian countries, Wang En-guo noted that it depends on whether Trump’s tariff policy is comprehensive. Trump can impose taxes on the originating country of the products.
He analyzed that there are two ways for supply chains to respond. Firstly, those that can relocate will move to places with lower tariffs. If they have the capability, they will go to the U.S.; otherwise, they will try to find loopholes. Secondly, once the U.S. implements comprehensive tariff increases, everyone will have to figure out how to reduce costs.
Zhang Sui-kun, Honorary President of the Guangdong Jiangmen Taiwanese Business Association, stated that some Taiwanese businesses in China focused on exports have already moved out. Most of the enterprises he knows are still in China. Taiwanese businesses generally focus on exports, so there will be an impact. Traditional industries that need to leave have already left.
President of Taiwan, Lai Ching-te, also attended the Taiwanese business Spring Festival event. Lai Ching-te expressed support for Taiwanese businesses, including welcoming them to invest in Taiwan, encouraging Taiwan-based enterprises to increase their investments, aiding small and medium-sized enterprises in investing in Taiwan, with support continuing until 2027.
During Trump’s first term, he initiated a trade war with China, affecting Taiwan’s electronics industry contract manufacturing giants. In 2019, as the trade war between the U.S. and China continued to escalate, Taiwanese electronic companies Foxconn and Pegatron relocated some production lines from mainland China to Indonesia, as part of a plan to diversify manufacturing locations to mitigate the impacts of the trade war. Pegatron leased a factory in the Batam Island Economic Zone, Indonesia, planning to invest $300 million to expand the Indonesian production base, which began operations in April of that year.