Taiwan Braces for Potential Stock Market Storm: Navigating Trump's Tariffs

Premier Cho Jung-tai Warns of Market Volatility Following U.S. Tariff Announcement

Taipei, April 4 - Premier Cho Jung-tai (卓榮泰) has urged citizens in Taiwan to prepare for potential market turbulence when the Taiwan Stock Exchange reopens on Monday. This warning comes in response to U.S. President Donald Trump's announcement of a "Liberation Day" tariff, set to impact global trade.

During a press conference in Taipei, Premier Cho outlined the Cabinet's strategies to support Taiwanese exporters within the global supply chain. The measures are a direct response to the "reciprocal tariff" unveiled by Trump in Washington on Wednesday (U.S. EDT).

The Premier highlighted that Taiwan's central bank and the Financial Supervisory Commission are closely monitoring foreign exchange rates, as currency manipulation was a factor considered by Trump in the formulation of the reciprocal tariff. Taiwan is anticipated to face a 32 percent tariff imposed by the U.S. President.

Addressing the tariff situation, Cho stated that the government would continue discussions with businesses, formulating comprehensive responses aimed at mitigating market instability when trading resumes on Monday.

Prior to Trump's announcement of increased import taxes on foreign goods, aiming to address what he perceives as unbalanced trade, the Taiwan stock market, Taiex, closed relatively unchanged on Wednesday at 21,298.22 before the commencement of a four-day holiday.

While Taiwan's financial markets were closed for Tomb Sweeping Day and Children's Day, U.S. stocks experienced a significant downturn on Thursday. According to the Associated Press, the S&P 500 had "its worst day since the pandemic crashed the economy in 2020," suffering a 4.8-percent loss.

The Dow Jones Industrial Average fell by 1,679 points, equivalent to a 4 percent drop, and the Nasdaq composite plunged by 6 percent. Furthermore, Taiwan Semiconductor Manufacturing Co. (TSMC)'s American Depositary Receipts (ADRs) listed on the New York Stock Exchange plummeted by over 7 percent.

TSMC, holding a weighting of over 35.67 percent, is the component stock with the largest influence on the Taiex, according to data released by the Taiwan Stock Exchange on March 31.

Premier Cho assured that the government will endeavor to provide stability to the people of Taiwan, but also emphasized the need for widespread preparedness for potential market shocks.