The Taiwan stock market faced a massive decline. The TAIEX index dropped below 20,000 points. Moreover, this drop occurred during the morning session on Monday. This marked a significant downturn for the market. Continue reading to learn more about the Taiwan stock market crash.
Major Index Decline
The TAIEX or Taiwan Weighted Index lost over 20,000 points on Monday. This was the first day after the Qingming Festival holiday. Major companies like Taiwan Semiconductor Manufacturing Company, Hon Hai Precision Industry Co., and MediaTek Inc. all reached their daily decrease limit. This was right after the market opened. Also, shares related to artificial intelligence (AI) experienced heavy losses.
Overall, the TAIEX fell sharply by 9.61 percent during the early trading session. Also, the decline in Taiwan was part of a broader trend across Asian stock markets. South Korea’s KOSPI index fell by 4.14 percent. Moreover, China’s Shanghai Composite Index decreased by 6.5 percent.
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Impact of U.S. Tariffs
The severe sell-off in Taiwan’s market and other Asian markets followed an announcement. This was by U.S. President Donald Trump regarding new tariffs. However, investors reacted negatively to the announcement. They feared the effects would harm global trade and economic growth.
Concerns over the U.S. tariffs led to heavy selling pressure in the markets. Also, the futures for the U.S. Dow Jones index fell by 2.22 percent. This suggests a poor start for trading in the U.S. as well. Moreover, experts believe that the new tariff measures create uncertainty in the global economy.
Taiwan Stock Exchange’s Response
After the steep decline, Taiwan’s stock exchange chief remarked on the high level of panic selling pressure in the market. Venson Tsai, an analyst at Cathay Futures in Taipei, stated that this situation stems from a lack of market confidence.
In light of this situation, Taiwan’s top financial regulator announced measures to help stabilize the market. Also, they imposed temporary curbs on short-selling of shares. This is for the upcoming week to lessen potential turmoil from the tariffs.
Specific Tariff Impacts on Taiwan
Taiwan faced a significant 32 percent import duty imposed by U.S. President Trump. This singled out Taiwan as one of the U.S. trading partners with the highest trade surplus. Also, this creates additional pressure on Taiwan’s economy.
As a response to the tariffs, Taiwan announced an aid package worth T$88 billion ($2.65 billion). This is to support companies that are negatively affected. Also, President Lai Ching-te mentioned plans to increase purchases from and investments in the United States. The goal is to establish a zero tariff between Taiwan and the U.S.
Taiwan Stock Exchange Chairman Sherman Lin mentioned that the exchange would work with financial regulators. This is to implement further measures if needed. Also, the aim is to restore confidence in the market. It is also to protect against additional declines.
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Consequences for Global Trade
The fears regarding tariffs have cast a dark cloud over the economic outlook worldwide. Many Asian economies rely heavily on exports to the United States. Thus, they face difficulties due to the tariffs. Also, investors worry that a slowdown in global trade will affect corporate earnings and economic growth everywhere.
The panic in the market reflects how investors feel about international trade. Also, they worry about the overall health of the global economy. Thus, the ongoing uncertainty regarding these tariffs causes anxiety among traders. With this uncertainty, global markets will continue to react strongly.
