Under escalating trade tensions, Taiwan is bracing for the economic impact of two major US policy shifts: a new 20% reciprocal tariff and a national security investigation under Section 232 of the Trade Expansion Act targeting semiconductors and related imports. In response, the Taiwanese government has unveiled a NT$113 billion (US$3.7 billion) relief and support package to cushion the blow and stabilize its high-tech export sector.

Taiwan’s trade negotiation representatives with the US have highlighted that Washington’s expectations for artificial intelligence (AI) policies are evolving at a rapid pace. This makes it increasingly difficult for Taiwan to make binding commitments. With America’s AI Action Plan positioning the country as a global hub for AI development, an era of stringent regulation is expected—focused on comprehensive supply chain oversight and efforts to curb China’s AI progress.

Asia Vital Components (AVC) is facing overwhelming demand for liquid-cooling systems amid the AI server surge, with plants running at full capacity and orders significantly exceeding supply. The company is accelerating expansion in Vietnam, adding production for cold plates, manifolds, quick connectors, and chassis, and expects growth to persist unless major macroeconomic or supply chain disruptions arise in the second half of 2025.