Taiwanese PC Makers Tariffs: Navigating the US-China Trade Conflict

MSI and Gigabyte are accelerating shipments to the US before July 9, when the current trade truce lowering tariffs is set to end. 📈

The Urgency for Taiwanese PC Makers

Taiwanese PC companies like MSI and Gigabyte are racing to send products to the US before July 9. This date signifies the end of a temporary tariff reduction between the US and China, increasing pressure on Taiwanese PC makers. The truce had previously lowered tariffs on Chinese goods entering the US from 145% to 30%, and on US goods entering China from 125% to 10%. However, with this truce ending, Taiwanese companies that manufacture in China face a challenging future.

Impact on Taiwanese Companies

Most importantly, MSI and Gigabyte are particularly vulnerable in this US-China trade conflict due to their reliance on Chinese manufacturing. About 20% of their sales come from the US, making the end of the truce a significant threat. As the demand for high-tech products like Nvidia’s RTX 5090 graphics cards rises in the US, supply chains are under strain. Therefore, MSI is expanding its production capabilities in Taiwan and establishing a new assembly site in California. Additionally, the company is partnering with factories in Vietnam and Thailand to reduce reliance on China.

Besides that, Gigabyte is also taking precautionary steps. The company reported record revenue in May due to early shipments, and it is constructing a new California facility to strengthen its supply chain. Both companies have criticized US policies, which they believe disrupt global business dynamics. For a broader understanding of the challenges faced by Taiwanese companies, Reuters provides a comprehensive overview of the rising US-China tensions.

Taiwanese Exporters and Currency Risks

Because Taiwanese exporters are dealing with a stronger New Taiwan Dollar (NTD), their exports have become more expensive in the US, reducing profits. Gigabyte’s Dandy Yeh highlighted that currency fluctuations could create additional hurdles. For instance, TSMC has noted that a 1% rise in the NTD can cut its operating margin by 0.4%. Consequently, MSI and Gigabyte face similar risks. Understanding these currency challenges is essential for grasping the full picture of the Taiwanese exporters’ situation.

Global Implications of the Tariff Truce Expiration

The challenges experienced by Taiwanese tech firms underscore broader issues with tariffs introduced during the Trump administration. Countries like China and India have criticized the US for protectionist policies that harm global trade. Therefore, the expiration of the tariff truce is expected to have far-reaching effects on global supply chains and technology markets. For more insights into the trade conflict between the US and China, including recent tariff changes, the BBC offers an in-depth analysis.

In conclusion, as Taiwanese PC makers like MSI and Gigabyte navigate these turbulent waters, their strategies and adaptations will be crucial in maintaining their foothold in the global market. 🌍