TAIPEI (Taiwan News) – Depending on how tariff talks with the US develop, Taiwan’s economic growth in 2025 could drop to 1.66% or even to 0.16%, the Chung-Hua Institution for Economic Research said Friday.

The institute was the first of Taiwan’s main think tanks to come up with a forecast following the Trump administration’s imposition of tariffs, though figures lower than the initially expected 3% had been mentioned. The US first set the tariff for imports from Taiwan at 32%, but then gave the country 90 days to negotiate while a basic 10% tariff took effect.

Economists at the Chung-Hua Institution worked out three scenarios for Taiwan’s gross domestic product in 2025, Radio Taiwan International reported. If the tariff stayed at 10%, the country could still manage a growth rate of 2.85%. If the US went ahead with a tariff of around 15% to 20%, economic growth would average 1.66%.

In the worst-case scenario, GDP would grow 0.16%, the economists said, adding that such a figure would only be likely in the case of a global slowdown or stagflation. The think tank said Taiwan’s economy would still expand, albeit by a small amount, but such a pessimistic scenario was unlikely.

As the US and China were both important trading partners, any tariff war between the two would influence Taiwan, but it was too early to tell whether such an impact would be positive or negative, the institute said. Economists said the main problem at present was uncertainty during the 90 days of negotiations about what lay ahead.