Trump Tariffs Push Taiwan Manufacturers to Direct Investments to Texas, US
Taiwan-based electronic companies are getting ready to boost their investments in the US. The companies are expected to make a major announcement about Taiwan Texas investments in May 2025. The announcement will coincide with President Donald Trump’s initial 100 days in the oval office, Reuters Reported.
Trump’s Tariff Effect
President Trump took power on January 20. Following his ascend to power, Trump has castigated Taiwan for shifting the semiconductor business. The President threatened to introduce import tariffs on countries with which the US has huge trade deficits. These tariffs are likely to target Taiwan.
Most Taiwanese manufacturers have invested heavily in production factories in their country to develop components for a wide range of products including electric vehicles and AI servers for the North American market.
Many Taiwanese electronic companies are now seeking to move some of their operations to the US. This could be an indication that President Trump’s threats on introducing tariffs on imports is already triggering the desired effect in Taiwan. President Lai Ching-te of Taiwan committed to make more investments in the US last week.
Richard Lee, who chairs the Taiwan Electrical and Electronic Manufacturers’ Association, revealed that Taiwanese multiple large manufacturers in the Asian country are considering expanding to Texas.
Most of these companies are in the AI server industry. The State seems to attract the top manufacturers due to its investor-friendly environment. The expected Taiwan investments in Texas comes after the State’s Republican government took proactive steps to attract investments.
Expected Expansions
Some Taiwanese companies like Compal, Foxconn, and Inventec already have running operations in Texas. However, they are expected to make public announcements on planned expansions to meet the rising demand for AI technologies.
As the demand for AI services increases, Taiwanese electronic firms see Texas as the most strategic location to set up production facilities. For instance, Foxconn’s Texas expansion is already on track. As the largest contract electronics company, Foxconn makes products for US big techs like Nvidia and Apple. The Taiwanese company has invested $33 million on land and buildings in Texas State’s Harris County.
Contract AI server and laptop manufacturers Inventec and Compal are also planning US expansion. Last month, executives from the two companies stated that Texas would be their preferred location.
“Texas is a leading candidate just because of the power that they’ve done. Samsung is putting a giant fab in, and that’s created a lot of extra power and infrastructure there. Texas is the only state in the U.S. that has its own grid. And so, we continue to evaluate that. But no decisions have been made yet,” Compal President and CEO Anthony Peter Bonadero said earlier this month.
Taiwan Trade Centers
Earlier this month, the Taiwan government announced plans to establish a trade and investment center in Texas and other parts of the US. The announcement was made by the Taiwan Ministry of Economic Affairs (MOEA) said Monday that it plans to set up an investment and trade center in Texas.
According to the MOEA, the trade centers will serve as a link between Taiwanese companies that expand to the US and the Taiwanese government. The centers will help the companies to access the assistance they need to move their processes forward. The trade centers are also expected to link Taiwanese investors to potential US partners to facilitate transfer of their products into the US market from countries where the Trump administration has introduced high tariffs.
The Taiwan government moved to set up the center soon after President Trump signed executive orders that imposed a 25% tariff on imports from Mexico and Canada. The orders also increased duty on Chinese imports by 10%. These tariffs affect over 300 Taiwanese companies that have established production facilities in Mexico. These include manufacturing giant Hon Hai Precision Industry, Quarter Computer, Wistron Corp and Pegatron Corp.
