“Finally standing on the same starting line as Japan and South Korea.”
Chen Shen-teng, Chairman of the Taiwan Association of Machine Tool & Accessory Builders (TMBA), praised the negotiation outcome immediately after the 15% tariff was announced. On the 20th, machine tool industry representatives also traveled north to hold a roundtable discussion with President Lai Ching-te. Among the results of the Taiwan–U.S. reciprocal tariff negotiations, traditional manufacturing industries are clearly the biggest beneficiaries.

According to the Ministry of Economic Affairs, the previous tariff rates were 24% for machine tools, 21.5% for machinery, and 25% for automotive components; 22.6% for plumbing hardware, 23.3% for hand tools, 24.6% for plastics, and 28.7% for textiles. With the new rate uniformly reduced to 15%, Taiwan can significantly widen the gap with competitors such as Vietnam and China.

Once one of Taiwan’s key export pillars, the machine tool industry recorded its worst performance since the global financial crisis in 2025, with annual exports falling to just over USD 2 billion—nearly half of what they were during the industry’s heyday.

However, with tariffs now settled and lowered, Chuang Ta-li, Chairman of the Taiwan Association of Machinery Industry, expects machinery output to grow by 5–10% this year. Huang Ming-ho, Chairman of Taichung Machine Tool, is even more optimistic, hoping for double-digit growth in operating performance.

While large traditional manufacturers are optimistic, small and medium-sized enterprises in the sector are comparatively pessimistic. “We’ve waited far too long for this moment. Taiwan’s industrial supply chain has already been partially broken,” one machine tool manufacturer told the magazine. “First there was the export ban to Russia, then the reciprocal tariffs. After more than two years of industry stagnation, many factories have shut down, and many second-generation owners no longer want to continue the business.”

“Although lower tariffs seem to make it possible to resume orders and renegotiate prices with customers, many subcontractors have already disappeared. It will take a long time for the supply chain to recover—some companies may even need to build production lines themselves to fill the gaps,” the manufacturer sighed. Orders have yet to return, but large upfront investments are already required to repair the damage.

Another major concern for traditional industries is the challenge posed by exchange rates. “The New Taiwan dollar is currently stronger than those of our competitors, and the impact should not be underestimated,” the machinery association noted. From 2021 to the present, the New Taiwan dollar has depreciated only 11.2%, while the Japanese yen has plunged by as much as 53.2%, and the Korean won by 34.1%. “Not to mention low-priced competition from China. We recommend that the government continue to pay close attention to exchange rate movements if it truly wants to support the industry.”