TAIPEI (Taiwan News) — Manufacturing sentiment continued to rise in October, but the Taiwan Institute of Economic Research warned Tuesday that tech firms remain uneasy over tariffs and US trade pressures.
TIER said business climate indicators for manufacturing, services, and construction all rose in October, signaling stability, per CNA. Manufacturing inched up to 91.37 points, while services and construction also posted gains, per UDN.
TIER Macroeconomic Forecasting Center Director Sun Ming-te (孫明德) said manufacturing has passed its most turbulent period, and with a 20% tariff cap in place, conditions are unlikely to worsen. He said manufacturers now hold a neutral outlook despite unresolved trade negotiations.
Sun noted a widening split in manufacturing, with AI-driven electronics outperforming while chemicals and steel face pricing pressure and softer demand. Retail and hospitality also strengthened thanks to department-store sales and holiday travel.
Tech companies, Sun said, remain concerned about Taiwan’s growing trade surplus with the US, which Washington is monitoring. They also face uncertainty over the US Supreme Court’s review of Donald Trump’s tariffs, which could push the White House toward new Section 232 measures targeting semiconductors.
Sun argued that dividing Taiwan’s economy into “tech” and “traditional” sectors is misleading because definitions shift over time. He said resilience depends on margins and innovation, noting that machinery and steel firms have already adopted robotics, AI, and defense-related production.
He warned that the AI boom, while powering exports, is widening gaps between AI and non-AI industries because ICT captures large profits but employs fewer people. He said economic resilience requires mechanisms that allow successful sectors to lift weaker ones.
On construction, TIER said government and tech-factory projects continue to support activity, even as the housing market remains weak. TIER researcher Liu Pei-chen (劉佩真) said higher mortgage rates, slower growth, and cross-strait tensions will keep wealthy buyers cautious.
