Taiwan's trade-reliant economy is expected to grow at a slower pace in 2025 than previously forecast, with the threat of turbulence from tariffs that may be imposed by the United States, as well as parliament-imposed budget cuts.

Taiwanese chip maker Vanguard International Semiconductor warned on Tuesday that U.S. tariffs on imported chips could spur inflation and impact global economic growth, but said it expects the direct impact on the company would be small.

Taiwan lowered its prediction for growth this year, signaling its concern about the potential impact of the Trump administration’s policies on its economy and a domestic fight over the budget.

US President Donald Trump's threat of tariffs on semiconductor chips has complicated Taiwan's bid to remain a global powerhouse in the critical sector and stay onside with key backer Washington,

Amid uncertainty over U.S. President Donald Trump's aggressive economic policy and over the progress of artificial intelligence, Taiwan has revised its 2025 economic growth forecast down from 3.29% to 3.