Taipei: Taiwan-based textile companies Eclat Textile Co. and Makalot Industrial Co., which produce more than 80 percent of their goods in Vietnam and Indonesia, expressed relief regarding the latest tariff rates imposed by the United States on the two countries. On Tuesday, the Trump administration announced a deal to impose 19 percent tariffs on Indonesia-made products, reduced from the initial 32 percent threatened in early April. Similarly, in early July, an agreement with Vietnam resulted in a 20 percent tariff on goods, down from the initially proposed 46 percent.

According to Focus Taiwan, Eclat and Makalot considered tariffs in the 19 to 20 percent range manageable, with the increased costs not seen as critical disruptions. Tiffany Lin, Eclat’s vice president of finance and accounting, stated that the tariff issues were evolving in a “positive” direction, with plans to negotiate pricing with clients based on the new tariffs. Eclat, which is believed to supply garments to brands like Nike, Under Armour, and Lululemon Athletica, has Vietnam accounting for up to 65 percent of its production and Indonesia another 25 percent.

There were speculations about Eclat postponing new investments in Indonesia due to the initially high tariff, but Lin clarified that their overseas investments are progressing as planned, essential for expansion. In June, Eclat announced a US$41 million injection in a rights issue proposed by its Indonesian subsidiary, Eclat Textile International, to facilitate the construction of a third facility in Indonesia.

Meanwhile, Makalot obtains 42 percent of its production from Indonesia and 38 percent from Vietnam. Company spokesperson Hengyu Lin expressed relief over the agreements with the United States, noting that his worries had been significantly reduced. Makalot plans to await the conclusion of tariff negotiations with other U.S. trading partners before discussing with clients how to share the financial burden.

Outside the textile sector, Teco Electric and Machinery Co., a leading Taiwanese electromechanical brand, also welcomed the tariff arrangement for Indonesia, where it manufactures power transformers. Teco noted solid demand for power transformers from the U.S., and the reduced tariff rate will enhance the competitiveness of products from its Indonesian facility in the American market. Teco highlighted that the cost structure of its Indonesian facility is lower compared to its counterparts in Taiwan, Japan, and South Korea.

In late September 2024, Teco acquired a 57.2 percent stake in Taiwan-based power transformer maker Shenchang Electric Co. Following the acquisition, Teco established a strategic partnership with Shenchang’s Indonesian affiliate, P.T. Sintra, aiming to expand its product portfolio in Southeast Asia, targeting North America and Taiwan.