Taiwan's Market Havoc: Bracing for a New Trade Landscape

Taiwan's stock market suffered a nearly 10% drop, its largest ever, after U.S. imposed hefty tariffs. The government announced financial support to stabilize the market and emphasized strengthening ties with the U.S. for economic resilience. Key industries, like electronics, face significant impact, with experts predicting potential economic slowdown.

The Taiwan stock market experienced an almost 10% decrease on Monday—the largest single-day plunge in its history—after the recent U.S. tariff announcement. President Donald Trump's decision to levy a heavy 32% duty has identified Taiwan as a major trading partner with a substantial trade surplus.

On reopening post-holiday, Taiwan's stock index tumbled to a year-long low. The National Stabilisation Fund, with T$500 billion in assets, hinted at possible intervention to steady the market, acknowledging short-term volatility as unavoidable. To mitigate the impact, Taiwan announced a T$88 billion support package as President Lai Ching-te reiterated his zero-tariff aspiration with the U.S.

The electronics sector, not included in the tariffs, still felt the blow, causing major companies like TSMC and Foxconn to drop nearly 10%. In response, Taiwan's financial regulator imposed temporary curbs on short-selling. Goldman Sachs adjusted Taiwan's rating to 'underweight,' illustrating concerns over the impact of high U.S. export exposure.

(With inputs from agencies.)