Taiwan\’s economy speeds up in Q2
Taiwan’s GDP Surges Past Forecast, AI Chips Drive Export Boom
Official statistics released Thursday showed that Taiwan’s economy expanded by 7.96 percent in the first quarter of the year, a growth rate that outstripped the economists’ 5.7 percent expectation set by a Bloomberg survey.
Fastest Quarterly Growth Since 2021
Government data indicate that this 7.96 percent expansion is the strongest quarterly acceleration observed since the second quarter of 2021, when the economy grew by 8.28 percent.
AI Chip Demand Fuels Trade Surplus
Taiwan’s dominant position in the global semiconductor market has become a critical factor in recent trade surpluses with the United States. In the past few years, a soaring demand for AI‑related chips has helped Taipei sustain a surplus that has attracted the attention of the United States’ tariff politics.
US Tariff Threats, Negotiations in Progress
US President Donald Trump has warned that a 32 percent tariff could be imposed on Taiwan’s shipments if the island fails to reach an agreement by Friday. Taipei, however, has reached “a certain consensus” with Washington on levies, though details remain undisclosed. Cabinet spokeswoman Michelle Lee said the country is still awaiting the conclusion of the US government’s decision‑making process and that both sides have entered negotiations on a joint statement.
Export Growth Resists Domestic Demand Slowdown
Jason Tuvey, deputy chief emerging markets economist at Capital Economics, noted that the boom in exports helps counter a domestic slowdown, as household consumption recorded its weakest growth of 0.6 percent year‑on‑year since late‑2021.
AI Chips Drive U.S. Trade Surplus, WTO‑Backed Protection
Rounded off around 60 percent of Taiwan’s exports to the United States, information and communications technology encompasses chips. Trump has accused the island of a 23 million‑person population of “stealing” the US chip industry. To stave off Trump’s punitive tariffs, Taipei pledged to increase investment in the United States, buy more of its energy, and increase its own defence spending.
Tariff Deals Across the Globe
Several economies—including the European Union, Britain, Vietnam, Japan, Indonesia, the Philippines, and South Korea—have struck initial tariff deals with Washington, while China has temporarily lowered tit‑for‑tat duties.
Future Outlook
Tuvey cautioned that the economic lift from tariff front‑running is likely to fade soon, but he expects exports to hold up well on AI‑related demand.
