Taiwan Stock Market Reacts to Global Trade Tensions: Expert Insights

Navigating Market Volatility: How Taiwan's Investors Can Weather the Storm

Following the announcement of unexpected tariff policies, dubbed "Liberation Day" by former US President Donald Trump, the Taiwan stock market opened on April 7th facing significant downward pressure. This stems from escalating global trade tensions fueled by the US's aggressive approach.

According to Cathay SITE's Chairman, 張錫 (Chang Hsi), the imposition of tariffs may disproportionately harm the United States itself. He draws parallels to the initial impact of the COVID-19 pandemic, suggesting this event can be viewed as another "Trump pandemic." 張錫 (Chang Hsi) advises investors to closely monitor which sectors might be exempt based on "American values" under these new policies. He emphasizes the importance of fundamental analysis and a balanced portfolio strategy, suggesting a mix of stocks and bonds. He cautions against leveraged trading during this period of market volatility.

張錫 (Chang Hsi) highlights the unexpected and aggressive nature of Trump's retaliatory tariffs, exceeding expectations of economists and international institutions. The Easter holiday period saw significant drops in global markets, with major indices in the US experiencing declines between 8.75% and 10.67%, and the Philadelphia Semiconductor Index (PHLX) plunging by 15.6%. European markets also suffered, with drops between 6.71% and 8.42%. Interestingly, mainland China, facing the heaviest 54% taxation, showed a relatively modest decrease. Taiwan's stock index futures plummeted by 9%, and Taiwan Semiconductor Manufacturing Company (TSM) dropped by 12.95%. This led to a sharp decline in the broader Taiwan stock market on that day. The level of fear in the financial markets mirrors the initial panic of the 2020 COVID-19 pandemic. Investors are cautioned against panicking and selling at low prices.