James C. F. Huang, Chairman of the Taiwan External Trade Development Council (TAITRA), says Taiwan’s automotive industry are proactively navigating the challenges posed by increased US tariffs, particularly the 25% tariff affecting auto parts.
Speaking at the Taipei AMPA automotive show, Huang acknowledged that the US remains Taiwan’s most significant automotive export market, with approximately 50% of all Taiwanese auto parts shipped to the US last year. He described the tariff situation as “fluid,” stating, “The situation is a little bit fluid because we are not certain about our policies. I know for automobiles and auto parts it is a 25% tariff.”
He emphasised that while these tariffs create immediate pressures, Taiwanese companies have proactively diversified their manufacturing strategies and locations in response.
“Our auto parts industries have already diversified their portfolios,” Huang explained, adding that several companies have established manufacturing operations directly within the United States or in Mexico, capitalising on the USMCA trade agreement.
Highlighting this trend, Huang, who served as the Taiwanese minister for foreign affairs between 2006 and 2008, provided a specific example: “One of the companies, they manufacture LED headlights. They were invited by the big three to go to Michigan and set up their manufacturing plant there two years ago. So it’s already happening.”
He further noted the tariff situation would accelerate such relocations, stating, “Definitely it will, because of the tariff.”
Despite these adjustments, Huang strongly emphasised a business-as-usual approach. When asked about his advice to Taiwanese exhibitors amid tariff concerns, Huang confidently stated: “Business as usual. No big deal.” He described Taiwanese businesses as resilient and adaptable, saying, “Our business people are very brave. So this is a country with practically no natural resources, with 23 million people here. If you look at what we have gone through in the past five decades, I’m quite confident in the resilience of our companies. I think they can weather the storm and they will survive, no problem.”
Huang also addressed the broader importance of other international markets in response to the barriers posed by US tariffs. He underscored the increased significance of regions such as the EU, Southeast Asia, Japan, South America, and particularly the Middle East. Regarding the Middle East, Huang highlighted Egypt and Saudi Arabia as strategic gateways: “I visited Egypt twice in the past couple of years. Quite a few European OEMs set up their manufacturing in Egypt. We are looking at parts manufacturing; we are quite competitive.”
Additionally, he referenced Foxconn’s joint venture with Saudi Arabia’s PIF sovereign fund, aimed at producing electric vehicles (EVs), stating, “Foxconn has a joint venture with Saudi’s sovereign fund in producing electric vehicles for the Middle East and with a greater scope covering Egypt and Africa.”
“The future will be built on collaboration if we are going to take mobility forwards.”
On the prospects of Taiwan becoming an automotive manufacturing hub beyond just parts, Huang candidly acknowledged a missed opportunity with traditional internal combustion engine vehicles, stating, “We missed the opportunity to become an automaking country in terms of ICE, right? Internal combustion engines. We are not good at that. We are good at auto parts and electronics.”
However, he expressed optimism regarding Taiwan’s future in EV manufacturing, led primarily by Foxconn. “In terms of EV, I think we have a chance,” he said, highlighting Foxconn’s aggressive expansion into international markets through strategic partnerships, including potential alliances with global automotive brands like Nissan. Huang explained, “Foxconn is very aggressive in looking for partnerships so that they can expand their EV production globally, not just for Taiwan.”
In summary, while acknowledging the immediate impacts of US tariffs, Huang portrayed a confident, strategic vision for Taiwan’s automotive sector, underpinned by flexibility, global diversification, and a forward-thinking approach towards electric vehicle technology.
“The future will be built on collaboration if we are going to take mobility forwards,” he concluded.
