Following the high tariffs imposed by US President Trump, tensions between the US and China have escalated. The US has implemented punitive tariffs as high as 245% against China, while China retaliated with tariffs up to 125%. The trend of decoupling between the two nations has intensified, placing unprecedented pressure on international supply chains for reorganization.

Under the assault of high tariffs, the previously intertwined economic relationship between the US and China is shifting towards complete decoupling. For Taiwan, this decoupling storm has affected the supply chains of many major companies and forced the industry to reconsider its future trajectory. In the past, Taiwan established many manufacturing bases in China due to lower costs, but the advantages of production costs in China are rapidly eroding under the current high tariff policies.

Some Taiwanese firms have shifted their production focus to Southeast Asia; however, under Trump’s “indiscriminate tariffs” policy, even moving production sites does not entirely shield them from US sanctions. It seems that Taiwanese manufacturers have only two paths to choose from:

1. Abandon the US market: However, Taiwan’s technology sector has a high dependency on American companies like Apple and Nvidia, making it extremely difficult in reality to give up the US market.
2. Align with the “Made in America” policy: Notably, TSMC has recently established a major factory in Arizona, while Taiwanese companies like Nvidia, Hon Hai, and Wistron have collectively invested over $500 billion in the US, demonstrating that “Made in America” is gradually transitioning from a strategic concept to practical implementation.

Nevertheless, even with substantial investments in the US market, embracing “Made in America” carries significant risks. Firstly, production costs in the US, including labor, land, and utilities, are much higher than in Asian countries, and moving production bases to the US will inevitably erode profit margins in the long run. Secondly, since the onset of the tariff war, the S&P 500 index has dropped over 7%, leading to a valuation loss exceeding $3.7 trillion. Despite White House spokesman Jason Miller stating that Trump’s fundamental stance remains unchanged, reports indicate that the Trump team is considering reducing certain tariffs on China to between 50% and 60% due to growing economic pressures.

The erratic nature of Trump’s policies poses substantial investment risks for Taiwanese companies seeking to fully embrace the US market. Therefore, it is advisable for Taiwanese firms to refrain from premature commitments or excessive bets on any single market, and to maintain decision-making flexibility as much as possible. Although the trend towards “Made in America” is difficult to reverse in the short term, and recent investments by major companies in the US are on the rise, the longer-term outlook suggests that growing economic pressures in the US could lead to a reconfiguration of global supply chains and a revival of multilateral trade. The decoupling of US-China trade forces nations to adjust their trade systems, and Taiwan must also confront this wave of change, reassessing its international positioning. Taiwanese enterprises must maintain a high degree of flexibility and foresight to find the best balance amid high tariffs, rising costs, and geopolitical risks in order to create new opportunities for development.