tsmc and foxconn at risk? taiwan weighs us market exit

2025-08-27 tsmc

taipei, Wednesday, 27 August 2025.
a prominent taiwanese analyst suggests tsmc and foxconn could face dire consequences if taiwan abandons the us market. this warning surfaces amid ongoing debates over potential tariff hikes. legislator kao chin-su-mei proposed abandoning the us market altogether, a move hsieh chin-he argues would be devastating. hsieh notes that taiwan’s trade surplus with the us could reach $100 billion this year, and losing access would cripple key industries. with semiconductor exports to the us accounting for over 40% of the total, the stakes are exceptionally high.

tariff turmoil and trade talks

The debate arises from potential reciprocal tariffs from the U.S., prompting discussions about alternative strategies [1]. Premier Cho Jung-tai presented a report on taiwan-us tariff negotiations, highlighting the complexities of the situation [1]. Legislator Kao Chin-su-mei suggested abandoning the U.S. market, triggering widespread debate [1]. These discussions occur amidst concerns that taiwan’s current tax rate, described as “20%+N,” may be unsustainable [6]. The executive yuan has refuted claims of improper negotiation tactics, asserting that discussions occurred at the u.s. trade representative office [1].

analyst’s stark warning

Hsieh Chin-he, chairman of wealth magazine, warns that abandoning the u.s. market could lead to the disappearance of major taiwanese companies like tsmc and foxconn [1]. He emphasizes the u.s. as the world’s largest consumer market, crucial for taiwan’s export-oriented businesses [1]. Hsieh notes that taiwan’s information and communication technology (ict) sector relies heavily on the u.s. market, accounting for over 61% of exports [2]. without access to the u.s., these key players, including tsmc, hon hai, and asus, would face significant challenges [2].

reliance on the u.s. market

Taiwan’s economic dependence on the u.s. market is significant [7]. Hsieh points out that taiwan is among the world’s largest countries in terms of trade surplus with the u.s. [6]. Abandoning the u.s. market would mean forfeiting this substantial surplus, potentially leading to economic repercussions [3][7]. Experts note that over 30% of taiwan’s exports go to the u.s., making it the largest export market [7]. In 2024, semiconductors alone accounted for 35% of taiwan’s exports, highlighting the sector’s vulnerability to trade disputes [3].

geopolitical and manufacturing concerns

The geopolitical implications of abandoning the u.s. market are considerable [3]. Concerns arise about taiwan’s ability to compete with china’s growing manufacturing capabilities [7]. While taiwan’s exports to china were 43.7% in 2020, they have decreased to 25.45% by july 2025 [6]. This shift highlights the increasing competition from chinese industries in sectors like petrochemicals and steel [6]. A potential 200% to 300% tariff on semiconductors, as suggested by donald trump, adds another layer of uncertainty [3].

tsmc’s strategic imperative

For tsmc, maintaining access to the u.s. market is a strategic imperative [2]. The company’s market leadership hinges on its ability to serve major u.s. clients [7]. Abandoning the u.s. market would impact tsmc’s manufacturing capacity and overall competitiveness [3]. The potential loss of access raises concerns about tsmc’s future prospects and its ability to sustain its position as a leading global semiconductor manufacturer [2]. These factors could significantly influence tsmc’s stock performance (tsm:nyse) as investors react to these developments [alert! ‘stock prices fluctuate based on many factors’] [GPT].

Bronnen

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