On 1st (local time), U.S. President Donald Trump signed an executive order imposing a 25% tariff on Canada and Mexico and a 10% tariff on China, raising concerns in Japan and Taiwan, which have maintained a trade surplus with the United States. This is due to worries that they might also suffer as the tariff war intensifies.
Japan's Ministry of Economy, Trade and Industry announced on 2nd that it has established a consultation window at the Japan External Trade Organization (JETRO) regarding the Trump administration's tariff measures. The plan is to provide legal and tax-related advice and information to corporations in Japan that may be affected by tariffs. There is also a goal to investigate the impact of tariffs on Japanese corporations that operate in Canada and Mexico.
According to The New York Times, more than 1,300 companies from Japan operate in Mexico, with more than half being manufacturing corporations. Many of these companies moved their production facilities to Mexico when the U.S.-China trade dispute escalated in 2018 during the first Trump administration.
Albert Park, chief economist at the Asian Development Bank (ADB), noted to The New York Times that it is ironic to punish countries that benefited from the restructuring of supply chains after the first tariffs imposed by the Trump administration.
Taiwan is also feeling the pressure. According to Taiwanese media, Chiu Ta-shing, executive chairman of the Chinese Asia-Pacific Chamber of Commerce and Industry (CACCI), said that there is a high possibility that shocks to the global economy could occur due to President Trump's tariff policy, and that Taiwan's economy is also expected to be significantly impacted.
The impact on the semiconductor industry, which is a key sector in Taiwan, is critical. Foxconn, which supplies parts to NVIDIA, announced plans to build a factory in Mexico last October.
Liu Pei-jen, a researcher at the Taiwan Institute of Economic Research (TIER), said, "President Trump will wield the 'sword' over the semiconductor sector after tariffs," adding that the Taiwan semiconductor industry, including TSMC, must respond cautiously to President Trump's new policies.
The impact of the tariff war is also expected to be significant on the Korean economy and corporations. According to the global investment bank Morgan Stanley, corporations with a large share of U.S. exports in their sales include ▲SK hynix 41% ▲LG Electronics 25% ▲Samsung Electronics 20% ▲LG CHEM 17% ▲LG Energy Solution 14%.
The Korea Institute for International Economic Policy stated in a report last October that if the U.S. imposes universal tariffs, including on South Korea, which has a bilateral free trade agreement (FTA), and major countries retaliate, South Korea's exports could decrease by up to $44.8 billion (approximately 65 trillion won) in a worst-case scenario.