2025-04-08: Tariffs Hammer Taiwan
LG Electronics Profit Decline Amid Revenue Growth in Q1 2025
Good Morning,
Below are some of the most important developments in the artificial intelligence, semiconductors, and cloud computing sectors in Asia today.
▪️ Taiwan: Taiwan Faces Economic Strain Amidst US Reciprocal Tariffs and Trade Challenges
TSMC faces significant challenges from the implementation of reciprocal tariffs by the Trump administration.
▪️ China: US Tariff Policy Reshapes Global Trade Dynamics
US tariffs are exerting wide-ranging impacts on international trade and industry dynamics.
▪️ South Korea: LG Electronics Profit Decline Amid Revenue Growth in Q1 2025
LG Electronics reported a decline in operating profit alongside robust revenue growth in the first quarter of 2025.
▪️ Taiwan: UMC and GlobalFoundries Merger Talks Reshape Semiconductor Industry Dynamics
UMC and GlobalFoundries are discussing a merger that has drawn considerable attention in the semiconductor industry.
For more information on these developments, please see the full report below.
Thanks for reading,
Rodney J Johnson
Today's Developments
Widely Reported On Issues of Importance
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Taiwan Faces Economic Strain Amidst US Reciprocal Tariffs and Trade Challenges
TSMC faces significant challenges from the implementation of reciprocal tariffs by the Trump administration.
US President Trump imposed a 32% tax on Taiwanese exports under a reciprocal tariff scheme, with an exemption for semiconductors subject to strict regulatory conditions.
The framework permits the use of 20% American components as a tariff humanitarian corridor and mandates through Annex 3 that products qualify for exemption only if at least 20% of their content is made in the USA. However, these provisions may be interpreted in ways that affect production capabilities for companies such as TSMC, particularly regarding chips manufactured in the US
Taiwan’s trade relationship with the US remains significant, with last year’s exports totaling US$116.3 billion, yet the heavy tariff is expected to cause a dramatic decline in exports—potentially up to a 63% drop—and a corresponding GDP loss of about 3.8%.
The immediate impact on Taiwan’s financial markets is clear, as evidenced by a steep stock market decline following the tariff announcements and ongoing market volatility that may last for two to three months or longer.
Economic experts are concerned about potential recessionary pressures in the latter half of the year as Taiwan may need to increase investments in US-based production to comply with the tariff exemption requirements.
Unlike previous administrations, the Trump administration shows less willingness to negotiate adjustments, adding further uncertainty to Taiwan’s economic outlook.
Taiwan faces additional pressure due to its position as a significant trade deficit country with the US, which weakens its negotiation leverage.
The higher tariffs on Taiwanese products, compared with lower tariffs imposed on nations such as Japan, South Korea, and European countries, have led to urgent diplomatic efforts. Taiwan’s Foreign Minister has engaged in negotiations with US counterparts, although doubts remain about the country’s overall bargaining power.
Global supply chains also confront challenges beyond the semiconductor sector.
Industries like consumer electronics and automobiles are expected to see increased import costs, and predictions indicate significant new car price rises that could alter consumer spending patterns. Furthermore, retaliatory measures, including a 34% tariff imposed by mainland China on US imports and export controls on rare earth minerals, contribute to ongoing uncertainties in the global technology supply chain and financial markets.
References for this Development
川普關稅風暴 台積電跳空跌停至848元創史上最大跌點
Trump's tariff storm TSMC gapped down to 848 yuan, the largest drop in history
United Daily News | Local Language | News
台積電投資3兆卻換來高關稅！BBC大哉問：台灣還有何籌碼，還上的了談判桌嗎
The Storm Media | Local Language | News
台積電成關稅重災戶！近11年來首次跳空跌停 12萬張賣單等排隊
UP Media | Local Language | News
川普關稅風暴》台積電創有史以來最大跌點！正式進入熊市
Trump’s Tariff Storm》TSMC hits its biggest drop in history! Officially entering a bear market
The Storm Media | Local Language | News
台股開盤重挫逾2000點失守2萬點！ 台積電跌停至848元
TTV News | Local Language | News
兩岸股市今起面對高關稅黑暗期 台陸專家：波動至少延續3個月以上
ETtoday | Local Language | News
川普重錘砸不穿台積電！謝金河示警「這家」剉咧等
Trump’s heavy hammer can’t break TSMC! Xie Jinhe warns "this" to wait
Yahoo News Taiwan | Local Language | News
川普關稅半導體暫豁免？研究機構最新看法 衝擊這時浮現
United Daily News | Local Language | News
關稅戰雙重衝擊？李同榮估央行出手救市 建議台積電停止美國擴廠計劃
United Daily News | Local Language | News
爆新系大老也不滿賴清德對美國不夠硬？他籲台積電暫緩赴美當籌碼
The China Post | Local Language | News
川普關稅「免死金牌」台積電有望解套？ 投資長：下半年景氣不容樂觀
Yahoo Finance | Local Language | News
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US Tariff Policy Reshapes Global Trade Dynamics
US tariffs are exerting wide-ranging impacts on international trade and industry dynamics.
The United States has introduced a "reciprocal tariff" policy that has reshaped global trade dynamics.
On April 2, 2025, US authorities imposed a 10% minimum benchmark tariff on imports while setting steep tariffs on goods from China, the EU, Japan, Vietnam, and India. Analysts expect these measures to restructure global industrial chains and prompt governments worldwide to adopt more aggressive industrial policies. Major US stock indexes dropped significantly following the announcement, reflecting heightened market uncertainty and concerns over escalating trade tensions.
In response, China announced its intention to counter the US measures by imposing a 34% tariff on US products effective April 10.
Chinese officials target what they describe as unilateral tariff policies while aiming to stimulate domestic economic growth through external pressure. Experts estimate that these reciprocal actions could accelerate de-dollarization and fragment global supply chains, forcing companies to reassess their operations amid rising tariff rates. European and UK officials have also indicated they may adopt similar proportional responses, thereby broadening the scope of international trade disputes.
These tariff measures affect multiple industries and markets.
The consumer electronics and machinery sectors, which rely heavily on US exports, are expected to encounter direct effects, while steel, logistics, semiconductors, and high-end medical equipment industries could suffer indirect consequences as companies adjust their production and supply strategies. Companies such as Fuling Technology, which derive a significant portion of their revenue from the American market, have experienced stock price volatility and operational challenges due to previous and current tariff escalations. The situation has raised concerns about increased costs for imported goods, potential inflation, and the risks of an intensified trade war leading to financial market instability.
The evolving trade environment now reflects heightened geopolitical tensions and significant international policy responses.
Multinational business leaders, including executives from companies like Apple and Samsung, have engaged actively at high-profile events such as the 2025 China Development Forum, seeking clarity on China’s domestic consumption policies and the broader global tariff landscape. Former policymakers and academic experts associate these tariff changes with fundamental shifts in the global economy. They predict potential reductions in global GDP and a continued trend towards regional trade agreements rather than traditional multilateral trade norms.
References for this Development
Abuse of tariff measures likely to backfire
China News | English | News
新闻分析｜关税政策冲击美国“科学核心基础设施”
News Analysis | Tariff policy hits the US "core scientific infrastructure"
China Daily | Local Language | News
China would have OK’d TikTok deal if not for US tariffs – Trump
Inquirer Net | English | News
耐克等品牌将被迫提价 美国关税政策或重创亚洲服装纺织业
Beijing News | Local Language | News
20位中外专家研判变局：关税战与AI如何重塑世界？
20 Chinese and foreign experts analyze the changes: How will tariff wars and AI reshape the world?
Caijing | Local Language | News
十大机构看后市：关税对垒开启 沧海横流方显英雄本色 中国政策发力时点可能提前
Sina Finance | Local Language | News
Fuling's Stock Rises Despite Chinese Disposable Cutlery Firm Warns About Risks From US Tariffs
Yicai Global | English | News
China says 'market has spoken' after Trump tariffs spark global stocks rout
CNBC | English | News
东方财富策略：关税冲击，亦是中期布局战略良机
Eastmoney Strategy: Tariff impact is also a good opportunity for mid-term strategic layout
Sina Finance | Local Language | News
美国“关税大棒”破坏全球贸易秩序 中国应对空间充足
The US "tariff stick" undermines the global trade order, and China has ample room to respond
Caijing | Local Language | News
超30家A股公司，紧急回应！事关“特朗普关税”！
More than 30 A-share companies responded urgently! It's about "Trump's tariffs"!
Sina Finance | Local Language | News
关税“风暴”席卷全球，周末券商热议“内需崛起”
Sina Finance | Local Language | News
特朗普关税，突发！欧盟，即将反击！
Trump's tariffs, breaking news! The EU is about to strike back!
STCN | Local Language | News
“挺住就能赢”？特朗普关税算盘怕难如意 | 新京报专栏
"Hold on and you'll win"? Trump's tariff plan may not work | Beijing News Column
Beijing News | Local Language | News
关税重压下，香港外贸业急寻出路
Caijing | Local Language | News
US reciprocal tariffs face more rifts amid public's worry over economic prospects
Global Times | English | News
中国政府关于反对美国滥施关税的立场：强烈谴责，坚决反对，贸易战、关税战没有赢家！
STCN | Local Language | News
China states its position on opposing U.S. abuse of tariffs
Xinhua | English | News
中国政府关于反对美国滥施关税的立场
The Chinese government's position on opposing the US's abuse of tariffs
Xinhua | Local Language | News
Multiple Chinese chambers of commerce resolutely oppose US 'reciprocal tariffs'
China Daily | English | News
Global Times | English | News
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LG Electronics Profit Decline Amid Revenue Growth in Q1 2025
LG Electronics reported a decline in operating profit alongside robust revenue growth in the first quarter of 2025.
LG Electronics estimated its operating profit at approximately 1.25 trillion won (around $856.7 million) for the first quarter of 2025, marking a 5.7 percent decline compared to the same period last year.
The company increased its revenue by 7.8 percent year-on-year to 22.74 trillion won, surpassing the 22 trillion-won threshold for a first quarter.
Rising logistics and shipping costs primarily impacted the operating profit, while growth in the business-to-business segments—especially in electric vehicle components, subscriptions, and HVAC services—helped sustain steady sales.
The strong performance of the core home appliances division, combined with successful sales in premium home appliances and built-in appliances for B2B customers, further contributed to the revenue increase.
The company attributed its record quarterly sales to quality growth across its B2B, subscription, and direct-to-consumer businesses.
This performance results from a strategic shift after exiting the smartphone market in 2021. A consolidated earnings report will be released by the end of April, and as of 11:00 a.m. on April 7, 2025, LG Electronics shares traded at 69,600 won, reflecting a 4.4 percent decline from the previous trading session.
References for this Development
LG Electronics Q1 operating profit down 5.7 pct to 1.25 tln won
Yonhap | English | News
LG Electronics estimates Q1 operating profit down 5.7% at $856.7M
Joongang Ilbo | English | News
(LEAD) LG Electronics Q1 operating profit down due to rising costs
Yonhap | English | News
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