The Taiwan stock market opened sharply lower on Monday, with the Taiex index plunging 9.8 percent as trading resumed following a long holiday weekend. The sell-off came amid rising global fears sparked by US President Donald Trump’s sweeping tariffs, which triggered turmoil in stock markets worldwide.

A monitor shows flight status at Kaohsiung International Airport, with all flights cancelled as Typhoon Krathon nears in Kaohsiung on October 2, 2024. (Photo by WALID BERRAZEG / AFP)

Markets in Taiwan had been closed on Thursday and Friday for a public holiday. During that time, global markets experienced significant losses as countries scrambled to respond to the new US tariffs. Taiwan investors returned to a bearish climate, with trillions wiped off global market capitalizations and growing uncertainty surrounding US-China trade relations.

Adding fuel to the fire, China announced retaliatory tariffs of 34 percent on US goods after Asian markets closed on Friday. The move escalated the trade war and deepened investor fears across the region.

In response, Taiwan’s Financial Supervisory Commission introduced temporary restrictions on short selling — a common strategy that profits from falling share prices — in a bid to ease volatility. The measures will remain in place until Friday.

While Taipei had earlier sought to avoid Trump’s tariffs by pledging more US investments and boosting energy imports, it was still hit with a 32 percent tax on Taiwanese imports, though semiconductor chips were excluded.

Despite the setback, Taiwanese President Lai Ching-te stated Sunday that the government has no plans to introduce retaliatory tariffs against the United States — Taiwan’s most critical security ally.

“As long as the response strategy is appropriate and there is public-private cooperation, the impact can be reduced,” Lai said.

Instead, Taiwan is looking to negotiate a zero-tariff agreement with Washington and has set aside $2.7 billion to support local industries affected by the new tax regime.

Taiwan maintains the seventh-largest trade surplus with the US, totaling $73.9 billion in 2024. Roughly 60 percent of its exports to the US are in ICT (Information and Communication Technology), including semiconductors — a crucial component of the global tech supply chain.

“The US levy would have a significant impact on export-driven Taiwan,” Lai added, while urging citizens “not to panic.”