TAIPEI (Taiwan News) — Taiwan Association of Machinery Industry on Thursday urged the government to respond to US President Donald Trump's postponed 32% tariffs on the nation's exports to America.

According to the association, Taiwan’s machinery exports to the US totaled approximately NT$232.3 billion (US$7.19 billion) last year. In contrast, machinery imports from the US reached NT$301 billion, resulting in a trade deficit for Taiwan’s machinery sector.

The association said the US' proposed tariffs on Taiwan are higher than those proposed on the nation's key machinery export competitors, including Japan (24%), South Korea (25%), and the European Union (20%). While the Trump administration postponed its higher tariffs for 90 days, the association warned that its potential impact on Taiwan’s machinery sector remains a significant concern, per CNA.

The association urged the government to negotiate with the US for zero tariffs or reduced rates. It also recommended fostering bilateral cooperation through contract manufacturing and offering incentives to attract American machinery firms to establish facilities in Taiwan.

The group called on the government to provide interest-free loans if US tariffs result in declining export orders. It also urged financial authorities and banks to extend loan terms, defer repayments, and increase lending limits to support affected manufacturers.

The government should take a more proactive approach in signing trade agreements with other countries or joining regional economic blocs to help businesses expand into markets beyond the US, the group said.

The association also urged the government to address Taiwan’s high steel price issue, which drives up costs for the machinery and fastener sectors. It suggested that financial authorities allow a moderate NT dollar depreciation to boost exports.

With the US imposing a 125% tariff on imports from China, the association advised the government to tighten import inspections and set up a special unit to prevent exporters from labeling Chinese goods as made in Taiwan.

Lastly, the group hopes the government will provide subsidies for equipment upgrades in manufacturing. It added the move would aid the machinery sector and accelerate manufacturing transformation.