Taiwan Sets Aside NT$30 Billion to Cushion Auto Industry Amid U.S. Tariff Deal

Why It Matters

The package safeguards a critical manufacturing cluster, protecting employment and export potential while ensuring Taiwan retains control over its automotive technology amid shifting trade rules.

Key Takeaways

• NT$30 billion allocated for auto sector support.
• Expected tariff impact may exceed 1% of output.
• Funds target R&D, upgrades, and export competitiveness.
• Subsidies cover parts suppliers and certification costs.
• Goal: preserve jobs and technological autonomy.

Pulse Analysis

The Taiwan‑U.S. trade negotiations have introduced uncertainty for the island’s automotive manufacturers, as new tariff provisions could raise the cost of U.S.-origin vehicles entering the market. While the agreement aims to deepen bilateral trade, the specific rules on country‑of‑origin and value‑added content mean Taiwanese automakers must adapt quickly to avoid losing price competitiveness. Recognizing this risk, the Ministry of Economic Affairs announced a dedicated NT$30 billion fund to cushion the sector, signaling proactive policy coordination with the broader trade agenda.

The fund’s design goes beyond a simple cash infusion; it targets the entire supply chain, from vehicle assemblers to the 2,700 parts suppliers that underpin the industry. By partnering with the Automotive Research & Testing Center and the Industrial Technology Research Institute, the government will channel resources into independent research and development, technology licensing exits, and international certification assistance. Subsidies will also offset equipment, mold, and testing expenses, enabling firms to meet global standards and accelerate entry into overseas markets. This holistic approach reflects a strategic shift toward higher‑value, export‑oriented production rather than reliance on low‑cost assembly.

For Taiwan’s economy, the initiative carries significant implications. The automotive sector supports roughly 300,000 households, and preserving those jobs helps maintain domestic consumption stability. Moreover, bolstering R&D capacity safeguards the island’s technological autonomy, a critical factor as global supply chains become increasingly politicized. If successfully implemented, the fund could spur a new wave of innovation, positioning Taiwan as a niche player in electric‑vehicle components and advanced automotive technologies, while cushioning the short‑term impact of tariff adjustments on the broader manufacturing landscape.

Taiwan sets aside NT$30 billion to cushion auto industry amid U.S. tariff deal

Focus Taiwan · 02 Oct 2026, 08:36 PM

Taipei, Feb. 10 (CNA) – Taiwan's Ministry of Economic Affairs (MOEA) has earmarked NT$30 billion (US$950 million) to support Taiwan's automobile industry as it prepares for changes to tariffs under a Taiwan‑U.S. trade agreement, according to Minister Kung Ming‑hsin (龔明鑫).

Kung said initial assessments indicate that the impact on domestic industrial output could exceed 1 percent but remain “manageable.”

The economic affairs minister said the funding would be set aside as dedicated support to help the automobile and auto‑parts industry absorb shocks, advance transformation and upgrading, and strengthen independent research and development and exports.

Kung made the remarks after hosting a symposium on the impact of Taiwan‑U.S. tariff negotiations with representatives from vehicle‑industry association groups and domestic automakers.

He said any tariff arrangements would apply only to U.S.-made vehicles because the talks involve a bilateral trade agreement. Vehicles would be defined as U.S.-made only if they meet country‑of‑origin and value‑added content requirements consistent with existing international standards.

Kung said small passenger‑vehicle and light‑truck categories would be negotiated separately, and resulting tariff outcomes may differ.

He said the ministry will work with Taiwan's Automotive Research & Testing Center (ARTC) and Industrial Technology Research Institute (ITRI) to assist automakers in identifying and carrying out transformation or upgrading plans.

Speaking at the symposium, Industrial Development Administration (IDA) Director‑General Chiou Chyou‑huey (邱求慧) said part of the program's focus is helping automakers that currently produce under technology‑licensing arrangements build independent research and development capabilities.

Chiou said subsidies will also extend to upstream and downstream suppliers, including parts, equipment and mold manufacturers, and will cover international certification and verification costs to help firms complete certification in Taiwan and accelerate entry into overseas markets.

The symposium was jointly chaired by Kung and Minister of Labor Hung Sun‑han (洪申翰), with representatives from the Executive Yuan's Office of Trade Negotiations and the Ministry of Transportation and Communications (MOTC) also attending.

Industry participants included executives from Yulon Nissan Motor Co., Kuozui Motors Ltd., Ford Lio Ho Motor Co., Foxtron Vehicle Technologies Co., China Motor Corp., Cotech Inc., Sanyang Motor and Yulon Motor Co.

Taiwan Transportation Vehicle Manufacturers Association (TVMA) Chairman Li Chien‑hui (李建輝) said the industry hopes the government will stabilize employment and ensure domestic producers retain technological autonomy.

The association said Taiwan's automotive industry includes domestic vehicle manufacturers and more than 2,700 parts suppliers, supporting employment for about 300,000 households.

The TVMA proposed establishing an industry‑impact early‑warning mechanism to dynamically monitor tariff‑related changes and provide concrete assistance. It also recommended creating an automotive‑industry transformation fund, launching talent programs, and offering tax incentives to encourage higher domestic production ratios.