Trump’s Tariff Revival: Can Taiwan’s ICT Industry Withstand the Supply Chain Reset?

In 2025, President Donald Trump’s announcement of a 32% tariff on Taiwanese exports sent shockwaves through the global supply chain. Although Taiwan remains one of the most trusted manufacturing partners for U.S. tech brands, its heavy reliance on these relationships—and its limited pricing power—have left it highly vulnerable. This article explores the structure of Taiwan’s exports to the U.S., how global brands are responding, and the strategic logic behind Trump’s policy. More importantly, it examines whether Taiwanese manufacturers can evolve from executors to architects in the next era of supply chain redesign.

Our Perspective

1.  Taiwan’s Export Exposure and the Strategic Rationale Behind U.S. Tariffs

According to 2024 trade statistics, the United States remained Taiwan’s largest export destination, accounting for 23.4% of total outbound trade. This level of dependence highlights the strategic importance of the U.S. market to Taiwan’s economy and its tech-driven export sector.

On April 2, 2025, President Donald Trump announced a sweeping tariff expansion—imposing a 32% “reciprocal tariff” on all imports from Taiwan, in addition to a 10% baseline tariff on goods from other countries. Although semiconductors were temporarily exempt, most other categories—including ICT end products, components, and communication technologies—were subject to the new duties. This situation not only drives up export costs for Taiwan’s ICT sector, but also heightens the risk of deferred orders, customer migration, and a fundamental restructuring of supply chain strategies.

While the official justification centered on reciprocal trade fairness and alleged currency manipulation, the underlying motivation runs deeper.

Taiwan represents one of the most efficient non-U.S. manufacturing ecosystems in the world—precisely the kind of globalized structure that stands in contrast to Trump’s push for “Made-in-America” industrial sovereignty. His policy aims to pull brands, jobs, and production back into what he considers “U.S.-friendly” territories, while Taiwan holds a dominant—and, in his view, overly influential—position in today’s global production networks.

In Trump’s logic, Taiwan also symbolizes offshoring’s downside. As a key manufacturing base for U.S. tech giants like Apple and Amazon, Taiwan is seen as capturing a large share of the value chain without contributing to domestic U.S. employment.

Finally, Taiwan’s partial supply chain entanglement with China—such as components routed through Chinese assembly or logistics—places it in a politically ambiguous zone. This makes Taiwan an expedient target within a broader trade realignment strategy.

In this light, the 32% tariff on Taiwan is not merely an economic measure. It is a geopolitical tool aimed at forcing global brands to reorganize their manufacturing footprints—and at reshaping the control structure of global supply chains.

2.  Taiwan’s Tech Export Structure to the U.S.: A Closer Look

According to Taiwan’s customs export data (based on HS two-digit classifications), total exports to the U.S. in 2024 reached NT$11.1361 trillion. ICT-related products made up a significant portion, concentrated in three primary categories:

• HS Code 84 (Machinery, Computers, Servers, etc.): Exports totaled NT$64.17 billion, accounting for roughly 5.8% of Taiwan’s exports to the U.S. These include servers, laptops, and other end-user devices that power U.S. enterprise computing and cloud services—making them prime candidates for tariff exposure.
• HS Code 85 (Electrical Equipment, ICs, Power Modules, etc.): Exports totaled NT$238 billion, or approximately 21.4% of total U.S.-bound exports. This category covers core electronic components such as ICs, PCB modules, and power controllers. These products are tightly linked to downstream tech demand and highly sensitive to global procurement shifts.
• HS Code 90 (Optical and Precision Instruments): With exports valued at NT$21.1 billion, this segment is smaller in volume but includes high-value items such as medical sensors and precision optics—key areas with high technical barriers and added value.

Combined, these three categories represent over 40% of Taiwan’s total exports to the U.S., highlighting the country’s heavy reliance on ICT-related shipments. Any shift in U.S. policy toward these categories carries the potential for asymmetric shocks to Taiwan’s industrial structure.

3.  Taiwan’s Structural Strength and Its Strategic Role in Brand Partnerships

3.1  More Than Hardware: Engineering Integration as a Strategic Asset

Although most of Taiwan’s ICT exports appear to be traditional hardware products, their true value lies in the deep engineering collaboration and supply chain integration with global brands. From server system architecture and thermal management to cable routing and compatibility validation, Taiwanese manufacturers are far more than executors—they are active co-developers of end products.

While global brands technically have the flexibility to shift orders, in practice it’s difficult to replicate the industry-specific know-how and collaborative efficiency that Taiwanese firms have built over decades. This explains why, in the face of tariff shocks and regulatory shifts, U.S. brands typically choose to work with their Taiwanese suppliers to adapt, rather than simply replace them.

3.2  What Brands Are Tied to Isn’t Geography—It’s Taiwan’s Engineering Capacity

Since the pandemic, U.S. tech brands have accelerated their push for “manufacturing sovereignty.” Yet rather than being excluded, Taiwanese companies have become even more embedded in this transition. From TSMC’s advanced fab in Arizona to Inventec’s HP assembly operations in Mexico, and Quanta and Foxconn’s expansions in Vietnam—many so-called “localized production” sites are ultimately powered by Taiwan’s engineering and supply chain expertise.

This division of labor—brands set the strategy, and Taiwan executes it—is emblematic of the new global manufacturing paradigm. While Taiwanese firms may outwardly appear to be contract manufacturers, in reality they hold a central role in enabling production, managing risk, and redesigning supply chains. Their influence is quiet but critical—an irreplaceable force behind the scenes.

4.  How U.S. Tech Brands Might Respond to Trump’s Tariff Policy

U.S. tech brands are unlikely to respond to Trump’s tariff policy with a full-scale return to domestic manufacturing. Instead, their real strategy is one of manufacturing re-coding—a deliberate reshuffling of production geographies and supply chain design to mitigate political and cost risks. While the rhetoric may emphasize “Made in America,” actual decisions are driven by cost efficiency, speed, risk management, and origin compliance.

Given the absence of mature ICT manufacturing ecosystems in the U.S.—combined with high labor costs and complex regulatory constraints—mainstream consumer electronics production remains impractical within the U.S. for the foreseeable future. As a result, brand strategies may involve:

• Dual BoM and supply chains: Creating U.S.-specific Bills of Materials and parallel supply chain flows to allow for flexible country-of-origin declarations and customs compliance.
• Leveraging USMCA for tariff optimization: Establishing final assembly or packaging operations in Mexico to qualify as North American origin under the U.S.-Mexico-Canada Agreement (USMCA).
• Co-developing risk mitigation frameworks with suppliers: Tariffs and geopolitical uncertainty become selection criteria; only suppliers that can rapidly establish new facilities, manage compliance, and shift orders flexibly will remain in the game.

Taiwanese manufacturers—backed by decades of engineering strength and deep supply chain integration—are well-positioned to navigate this reset. Those that prove agile and resilient in this new reality won’t be marginalized; they are likely to move even closer to the center of brand strategy and supply chain decision-making.

5.  Conclusion: Short-Term Pain, Long-Term Realignment

In the short term, the 32% tariff on Taiwanese ICT products will inevitably impact export momentum—particularly for high-value end products whose production remains geographically concentrated. Even with close brand partnerships, Taiwanese companies will struggle to fully pass on the sudden cost burden to clients. Limited bargaining power, coupled with the policy uncertainty surrounding Trump’s tariffs, puts pressure on pricing strategies, order visibility, and customer negotiations—ultimately weighing on profit margins.

Moreover, relocating supply chains takes time, investment, and coordination. Whether companies can reconfigure production footprints, build tariff-optimized routing, and maintain delivery stability within a tight window will determine who survives—or even gains—from this disruption.

Over the long term, if these tariffs persist, they could serve as a catalyst for broader realignment across the global ICT supply chain. Taiwanese firms must accelerate efforts to build regionally diversified production networks, strengthen compliance and tax-risk engineering capabilities, and deepen integration with brand-side technical ecosystems. Only then can they shift from passive manufacturers to proactive designers and executors of the next-generation supply chain architecture.

This article is part of our Taiwan Tech and Market Shifts series.
It explores how Taiwan’s tech industries are adapting to global shifts in supply chains, manufacturing, policy, and innovation.

See more in this category, or explore more notes here.