When the reciprocal tariffs were announced, Taiwan was in the midst of the Qingming Festival holiday. On the first trading day after the break, the stock market plunged, hitting the "limit-down" lock and causing significant panic among investors. Although Donald Trump subsequently announced a 90-day suspension on April 9, the domestic industry has already split into two realities: major manufacturers are facing a wave of rush orders, while some small and medium-sized enterprises (SMEs) are facing order cancellations.
Nearly one month has passed since the tariff announcement. Regarding the countermeasures proposed by the government, Hsu, Yu-Jen, stated that Taiwan has entered the negotiation table far too late. He estimates that Taiwan may have to wait until the second or third round of talks to get involved. In reality, Taiwan had an opportunity to engage when Trump first took office, which would have allowed it to enter the first round of negotiations. Now, as many countries begin talks with Trump—many of whom have prior experience dealing with him—Taiwan is not only slower than others but also lacks initiative. "Trump's governing team is relatively unfamiliar with Taiwan compared to others," Hsu noted.
Recalling the situation, Hsu said, "We had a handful of good cards at that time," citing energy procurement, TSMC, and military purchases, all of which align with U.S. demands. Yet, in the blink of an eye, Trump announced a 32% tariff on Taiwan, shocking everyone. However, Trump's strategy is often to set unreasonable conditions in the expectation that the other party will throw out counter-conditions, eventually reaching a relatively reasonable agreement through back-and-forth bargaining.
Hsu observed that Trump is not someone susceptible to details, such as negotiation figures or specific items; what matters to him is whether he wins, and by how much. However, Taiwan does not negotiate with a holistic approach, but often gets stuck on details.
"We are not currently negotiating a Free Trade Agreement (FTA), nor are we discussing some 'Taiwan-US Trade Initiative'," Hsu emphasized. The goal is to determine how to lower tariffs within 90 days to a level that satisfies all parties and enables Taiwanese companies to remain viable. The government must have a sense of urgency; after all, every day that passes in the 90-day window is one day lost.
Furthermore, the Taiwanese public is bewildered. They question why, despite TSMC investing approximately $100 billion (NT$3.3 trillion) in the U.S., Taiwan is still being hit with heavy taxes, seemingly getting nothing in return. Hsu believes that building a chip supply chain in the U.S. is not like opening a bubble tea shop; it requires a long-term plan spanning the next 10 to 20 years.
Instead of arguing about why investment in the U.S. is necessary or worrying about the "hollowing out" of Taiwan—which is already a settled reality—Hsu suggests the focus should be on how to make U.S. investments profitable and how to help Taiwanese companies achieve victory in America.
In the past, Taiwan viewed the U.S. as a key market. Now, investing there means facing local regulations, policies, land issues, and labor laws. The most critical issue is to avoid turning a winnable game into a losing one. Taiwan should slowly reveal its cards to the U.S., rather than going "all-in" at once.
However, during this period, TSMC announced a $100 billion investment in one go, including three wafer fabs, two advanced packaging plants, and one R&D center. President Lai Ching-te also proposed five major response strategies on April 6, including the slogan "Decouple from China, Enter North America," initiating negotiations with the U.S. from a zero-tariff starting point, and eliminating non-tariff trade barriers. Does leading a delegation to invest in the U.S. equate to "going all-in with a good hand"?
Hsu commented that the proposal for zero-tariff negotiations was a bit hasty at the moment. He surmised that the administration might have been shocked by the sudden downturn in the situation. However, he believes the direction was wrong because Vietnam also proposed zero-tariff negotiations, yet the U.S. did not follow up on it at all. The most important question remains: "What is your benefit to me?"
Regarding what Taiwan has that benefits the U.S., it comes down to three things: technology chips, national defence, and energy. Since TSMC has already committed to increasing its investment to $100 billion, whether further concrete investment plans and schedules can be proposed will be key.
Additionally, Hsu believes the government must be able to convince enterprises that negotiating on a united front will yield better results. Otherwise, if Taiwanese companies and the government go to Washington alone, they will be at a disadvantage.
He pointed to the Japanese government, which leads companies like Mitsubishi and Toyota to Washington as a group. In contrast, Taiwan appears to allow enterprises to chart their own course without an integrated government strategy, making it easier for negotiations to stall.
He worries that Trump may eventually lose patience and impose tariffs on all countries that have not yet finalised talks, announcing a blanket tariff enforcement. In that scenario, Taiwan would suffer severe losses, and the public would again feel that the government's and enterprises' efforts were of no help.
Hsu suggests that, with the remaining 60 days, the government should adopt a strategy to settle one issue at a time: negotiate chip issues first, then defence, and finally settle energy issues, all while moving in sync with Taiwanese enterprises.
As for whether the fact that President Lai does not hold a complete governing majority will affect negotiation progress, Hsu, Yu-Jen, said he has met with the Legislative Yuan caucus. Regarding the 3% defense budget, there is a certain consensus between the ruling and opposition parties. Therefore, the message to Trump's team in Washington should be that everyone is already in agreement. "Try not to let the Americans feel that Taiwan is disunited," Hsu advised. He added that if President Lai is willing to show some goodwill and allow the opposition party to share some credit for the negotiations, the process would likely be much smoother.
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