Global Trade Under Pressure From U.S. Tariffs

As global trade dynamics shift under the weight of U.S. tariffs, both Europe and Taiwan are grappling with the repercussions of President Donald Trump's policies. From the gas markets in Europe to the high-tech industries in Taiwan, the impact of these tariffs is reverberating across economies, prompting significant financial responses and strategic adjustments.

In an interview with Eurogas’ Secretary General Andreas Guth, the potential fallout of U.S. tariffs on the European gas market was explored in depth. Guth emphasized the "uncertainty" surrounding costs, regulations, and future demand for gas, highlighting the strategic importance of U.S. liquefied natural gas (LNG) in the wake of reduced supplies from Russia following its invasion of Ukraine. "We clearly are still in a situation where Europe needs to continue the diversification of its natural gas imports," Guth stated, underscoring the critical role the U.S. plays in securing these supplies.

Guth pointed out that while gas has largely been spared from the new wave of tariffs, the broader implications of tariffs on steel and aluminum could hinder the construction of new LNG export terminals. "If you impose tariffs on these products, that can impact the price of LNG export terminals," he explained. This could complicate long-term contracting, which Europe desperately needs to stabilize its gas supply. The uncertainty surrounding gas demand is exacerbated by climate legislation and the ongoing global trade war, creating a challenging environment for future negotiations.

On the regulatory front, the European Union's methane emission regulations add another layer of complexity. Guth highlighted that while the need to mitigate methane emissions is essential, the current reporting requirements are vague, leaving gas importers unsure of compliance standards. "The regulatory requirements to report are very unclear," he noted, emphasizing the need for clarity in these regulations to facilitate smoother operations in the gas market.

Turning to Taiwan, the government has responded to the pressures of U.S. tariffs by allocating $2.7 billion to support industries adversely affected by the new trade policies. Announced on April 4, 2025, this financial package aims to bolster sectors facing a hefty 32 percent tax on imports, excluding semiconductor chips. Premier Cho Jung-tai described the tariffs as "unreasonable" and "extreme," indicating that Taiwan would seek negotiations with Washington to mitigate their effects.

In 2024, Taiwan's trade surplus with the United States was reported at $73.9 billion, with approximately 60 percent of exports comprising information and communications technology (ICT) products, including vital semiconductor chips. The government plans to use the earmarked funds to provide financial support, reduce administrative costs, improve competitiveness, and diversify markets. Cho noted that the industrial and agricultural sectors would be the primary beneficiaries of this assistance.

Specific products expected to bear the brunt of the tariffs include electronics, steel, machinery, and building materials. Vice Premier Cheng Li-chun commented on the extreme nature of the tariffs, stating, "While we did run simulations based on it, that doesn't mean we consider it reasonable. In our view, it exceeds what would be a reasonable expectation."

Despite the exclusion of semiconductor chips from Trump's tariffs, analysts warn that the levies on components could have a cascading effect on the chip industry, which is crucial to the global economy. Trump has previously accused Taiwan of "stealing" the U.S. chip industry and has threatened tariffs of up to 100 percent on semiconductor imports from the island. Andrew Kam Jia Yi, an associate professor at the National University of Malaysia, suggested that Taiwan might lobby for exemptions, noting that Trump often negotiates from a position of strength, presenting the worst-case scenario before settling on a more favorable outcome.

As both regions navigate the complexities of U.S. tariffs, the overarching theme remains one of uncertainty. For Europe, the reliance on U.S. LNG continues amidst questions about future gas demand and regulatory clarity. In Taiwan, the government’s proactive measures aim to cushion the impact of tariffs while seeking diplomatic solutions to ease trade tensions with the U.S.

Ultimately, the unfolding trade landscape under Trump's administration poses challenges and opportunities for both Europe and Taiwan. As they adapt to the new economic realities, the resilience of these regions will be tested, with global implications for trade and energy markets.