TAIPEI (Taiwan News) — Economics Minister Kuo Jyh-huei (郭智輝) met with semiconductor supply chain firms on Wednesday, rallying the industry behind a long-term competitiveness plan.

Kuo outlined five measures to strengthen the sector’s foundations, per CNA. These include pushing smart manufacturing and AI to improve efficiency, offering incentives for domestic demand, and diversifying raw material sources to secure a democratic supply chain.

He also proposed raising research and development tax deduction limits for small businesses to drive innovation in niche markets, per MoneyDJ. Current schemes include NT$6 billion (US$200 million) in export loan guarantees, NT$5 billion in SME loan increases, NT$25 billion in R&D and transformation subsidies, and NT$10 billion for overseas market expansion.

The Small and Medium Enterprise Administration explained that Washington on July 31 lowered Taiwan’s tariff rate from 32% to 20% but is planning new levies on semiconductor imports from all countries.

The administration noted that while most companies expect direct or indirect effects from US tariffs, they also face risks from further US policy shifts, Taiwan dollar volatility, and raw material price swings. Businesses urged the economics ministry to boost Taiwan’s presence at major trade shows, and attract more foreign investment.

To offset currency risks, the economics ministry is promoting hedging awareness and providing preferential loans. These measures aim to lower costs and barriers for small-to-medium businesses seeking to protect themselves from exchange rate volatility.