TAITRA INDEX report (Dec 2024 published)

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TAITRA INDEX report (Dec 2024 published)

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Key Risks of Concern to Exporters

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Regions Expected to Do Well

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Over half of Taiwanese corporate owners express confidence in the U.S. and ASEAN/ South Asian countries as key markets for the next three years, with optimism toward these regions further increasing relative to others after the election.
While optimism toward China has also shown some improvement, it continues to rank as the region with the lowest outlook among Taiwanese exporters.

Exporters Expectation Index

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The Exporters Expectations Index rose from 42.8 (pre-election) to 45.1 (post-election), reflecting reduced uncertainty and cautious optimism toward the new pro-business administration following the U.S. presidential election.

However, with the index remaining below the neutral threshold of 50, the results underscore exporters' continued caution in navigating a complex and challenging global trade environment.

Exporters' Confidence in the Current Business Environment

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Taiwanese exporters maintain a cautious stance amid an uncertain external trade environment, reflecting a generally reserved outlook.

However, when compared to the Exporters Expectations Index, which shows a notably more optimistic reading, there are signs of improving sentiment and potential optimism for the future.

TWD-USD Exchange Rate Outlook for the Next Three Years

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Taiwanese exporters are nearly evenly split in their views on the TWD-USD exchange rate over the next three years, with expectations for USD appreciation slightly outpacing predictions of stability or depreciation.

This close distribution highlights significant uncertainty about exchange rate trends, presenting challenges for corporate planning and risk management.

Expected U.S. Tariff Changes Over the Next Three Years

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More than 60% of Taiwanese exporters expect a 10–20% increase in U.S. tariffs over the next three years, aligning with President-elect Trump’s campaign promises.

Majority of the remaining respondents anticipate only minor adjustments, suggesting an overall expectation of moderate tariff growth without significant escalation.

Pricing Power to Manage Tariff Costs

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67.3% of Taiwanese exporters are confident in their ability to partially pass on tariff costs to customers, demonstrating competitive resilience.

Additionally, 10.7% expect to fully transfer costs, and 1.5% even anticipate leveraging tariffs to enhance profitability.

Meanwhile, 20.5% of exporters foresee absorbing all tariff costs, highlighting an urgent need to explore strategies for mitigating these risks and improving competitiveness.

Plans to Manufacture in the U.S.

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Currently, 8.8% of Taiwanese exporters either produce or plan to establish manufacturing operations in the United States.

As President-elect Trump assumes office and implements his trade policy agenda, businesses may face new geoeconomic dynamics that could reshape their manufacturing strategies.

Geoeconomic Preparedness Index

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Corporates predominantly rely on traditional strategies, such as cost reduction and increased R&D, to address geopolitical risks.

In contrast, more advanced approaches—such as strengthening geoeconomic analysis and enhancing financial resilience—remain underutilized, highlighting significant opportunities to improve long-term risk management and competitiveness.

AI Investment Outlook for the Coming Year

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