Reciprocal tariffs have entered a 90-day buffer period, and countries have stepped up their efforts to negotiate with the United States, hoping to minimize the damage. Lian Xianming, president of the China Academy of Economics, listed three reasons today, believing that Trump’s target tax rate for Taiwan is 15 to 20%. The focus of Taiwan’s negotiations should be to strive for electronic supply chain exemptions, which will have a greater impact than the tax rate.

U.S. President Trump imposed reciprocal tariffs on more than 180 countries around the world on April 2, and announced a 90-day suspension on April 9. During this period, only 10% reciprocal tariffs will be implemented.
The China Academy of Economics held a seminar on "Trump's Tariff Storm: Think Tank Perspective x Policy Response" today. Lian Xianming listed three reasons why he believes that Trump's reciprocal tariff floor price is 10%, and the possible target tax rate for Taiwan is between 15 and 20%.

Lian Xianming pointed out that firstly, when Trump raised tariffs many times, he usually used 25% as the benchmark; secondly, in this reciprocal tariff, the European Union, which is most likely to confront the United States head-on, imposed a tax rate of 20%; thirdly, Trump’s strongest personal ally, Israel, imposed reciprocal tariffs at 17%.

Based on the above background, coupled with Taiwan's high surplus with the United States, Lian Xianming believes that of course the final discussion is below 15%, but a range of 15 to 20% is more likely.

Lian Xianming added that it would be best if Taiwan could seek to list the electronics supply chain as an exempted item. The impact would be far greater than the tax rate, because about 70% of Taiwan's products exported to the United States are ICT products, and the electronics supply chain is very complex and difficult to move back to the United States in a short time.

As for how Taiwan will deal with the ongoing confrontation between the two major economies, the United States and China, Lian Xianming said that Taiwan's role is very subtle and it should not directly confront the United States, but it does not need to make a clear stance on this issue. At this stage, the focus is on negotiations with the United States, and then the response strategy will be decided depending on the negotiation situation.

Yang Shufei, deputy director of the Regional Development Research Center of the Chinese Academy of Economics, reminded that during negotiations with the United States, it is necessary to avoid obvious discriminatory treatment against China to avoid retaliation from China in the future.

After Trump announced reciprocal tariffs, the society was in an uproar. Some people advocated that we should "get tougher." Lian Xianming said, "Don't be kidding." The size of the United States is too far behind that of Taiwan, and Taiwan's economy is not strong enough to compete with others.

As for the confrontation between the two powers of the United States and China, who can last longer in the end? Wu Jiaxun, deputy director of the Institute of Continental Economics of the China Academy of Economics, believes that the impact of the tariff war is certain. Whether it will collapse will not happen on either side. Whoever can last longer will return to the characteristics of bilateral leaders.

Wu Jiaxun analyzed that the hardest hit by the tariff war is the enterprise. Chinese leader Xi Jinping does not need to face a real election and can not care so much about the huge production costs borne by enterprises. In comparison, the United States has a midterm election test. This alone shows that there is a difference in the cost tolerance of enterprises between the leaders of the United States and China.