Taipei: Taiwan's Ministry of Economic Affairs (MOEA) has allocated NT$30 billion (US$950 million) to bolster Taiwan's automobile industry in anticipation of tariff changes resulting from a Taiwan-U.S. trade agreement, Minister Kung Ming-hsin announced.
According to Focus Taiwan, initial assessments by the MOEA suggest that the impact on domestic industrial output could surpass 1 percent, but the situation is expected to remain "manageable." The allocated funds are intended to provide targeted support to the automobile and auto parts sectors, helping them to absorb potential shocks, advance transformation and upgrading efforts, and enhance independent research and development as well as exports.
Minister Kung shared these insights after leading a symposium on the impact of Taiwan-U.S. tariff negotiations, which included industry association groups and domestic automakers. He emphasized that any tariff arrangements would apply solely to U.S.-made vehicles, as the discussions pertain to a bilateral trade agreement. Vehicles will be classified as U.S.-made only if they meet specific country of origin and value-added content criteria in line with international standards.
Kung also noted that negotiations for small passenger vehicles and light trucks would be conducted separately, potentially leading to different tariff outcomes. The ministry plans to collaborate with Taiwan's Automotive Research and Testing Center (ARTC) and the Industrial Technology Research Institute (ITRI) to assist automakers in devising and implementing transformation or upgrading strategies.
At the symposium, Industrial Development Administration (IDA) Director-General Chiou Chyou-huey highlighted the program's goal of aiding automakers currently operating under technology licensing arrangements to develop independent research and development capabilities. Subsidies will also be extended to suppliers, including parts, equipment, and mold manufacturers. These subsidies will cover international certification and verification costs to facilitate certification in Taiwan and expedite entry into international markets.
The symposium was co-chaired by Kung and Minister of Labor Hung Sun-han, with participation from representatives of the Executive Yuan's Office of Trade Negotiations and the Ministry of Transportation and Communications (MOTC). Industry attendees included executives from companies such as Yulon Nissan Motor Co., Kuozui Motors Ltd., Ford Lio Ho Motor Co., Foxtron Vehicle Technologies Co., China Motor Corp., Cotech Inc., Sanyang Motor, and Yulon Motor Co.
Taiwan Transportation Vehicle Manufacturers Association (TVMA) Chairman Li Chien-hui expressed the industry's hope that the government will stabilize employment and ensure that domestic producers maintain technological autonomy. The TVMA noted that Taiwan's automotive sector encompasses domestic vehicle manufacturers and over 2,700 parts suppliers, supporting jobs for approximately 300,000 households.
The association suggested establishing an industry impact early warning mechanism to dynamically monitor tariff-related changes and provide tangible assistance. It also recommended the creation of an automotive industry transformation fund, the launch of talent development programs, and the provision of tax incentives to encourage higher domestic production ratios.