TAIPEI: Shares in Taipei plunged 9.7 percent on Monday, their heaviest loss on record, as traders reacted to US President Donald Trump's sweeping tariffs that triggered a massive global selloff.
The Taiex index shed 2,065.87 points to 19,232.35 on fears about a global recession following Trump's sweeping levies against trade partners and China's retaliation.
“The Taiwan index is tech-dominant and their tech companies are closely tied to US clients, thus suffering from dual concerns related to the US over AI investments and both first and second order impact of tariffs,“ Xin-Yao Ng, a fund manager at Aberdeen Investments, told Bloomberg.
Market heavyweight and chipmaking giant Taiwan Semiconductor Manufacturing Co fell by the stock exchange's 10 percent daily limit, even though the critical chip sector was not targeted by Trump's tariffs.
Taiwanese markets were closed for a holiday on Thursday and Friday as trillions of dollars were wiped off the value of global stocks and countries scrambled to limit the impact of Trump's levies.
Taiwan's financial regulator announced on Sunday temporary limits on short selling -- a bet that shares will fall -- to stabilise the market when trading resumed.
The measures will remain in place until Friday, the Financial Supervisory Commission said in a statement.
TWSE chairman Sherman Lin said the stock exchange would “remain vigilant” and implement further measures if needed.
“For future market developments, we will closely monitor and respond accordingly, with a certain degree of agility and attitude, to face the challenges,“ Lin said.
Taipei had sought to avoid Trump's threatened tariffs by pledging increased investment in the United States and more purchases of US energy, but it was still hit by a 32 percent tax on its imports, excluding semiconductor chips.
Taiwanese President Lai Ching-te said on Sunday the government did not plan to impose retaliatory tariffs on products from the United States, the island's most important security backer.
Instead, the government is seeking to strike a deal with Washington for zero tariffs and has earmarked $2.7 billion to help domestic industries affected by the new tax.
Taiwan's trade surplus with the United States is the seventh highest of any country, reaching $73.9 billion in 2024.
Around 60 percent of Taiwan's exports to the United States are ICT -- information and communications technology -- which includes chips.
Lai said on Sunday the US levy would have a “significant impact” on export-driven Taiwan but he urged Taiwanese people “not to panic”.
“As long as the response strategy is appropriate and there is public-private cooperation, the impact can be reduced,“ he said.
