TAIPEI: Taiwan's benchmark stock index plunged nearly 10% on Monday, marking its largest single-day drop since at least 1990, as fears of the newly announced U.S. import tariffs hit the market. The index fell to its lowest level in over a year following President Donald Trump's announcement of a 32% duty on Taiwanese exports, spotlighting Taiwan’s significant trade surplus with the United States.

Market analysts described the situation as a severe crisis in market confidence, citing "panic selling pressure" according to Venson Tsai from Cathay Futures. In response to the fallout, Taiwan's top financial regulator imposed temporary curbs on short-selling to mitigate further turmoil. Shares of major companies, such as semiconductor giant TSMC and electronics manufacturer Foxconn, both descresed nearly 10%, triggering the market's circuit breaker.

In the wake of these developments, Taiwan's government, led by President Lai Ching-te, announced an aid package worth T$88 billion (approximately $2.65 billion). This plan aims to cushion the economic shocks faced by businesses affected by the tariffs. Lai emphasized a commitment to establishing a zero-tariff regime with the U.S. during potential negotiations, expressing that he seeks to foster a “golden age” of shared prosperity between Taiwan and the U.S.

Foreign Minister Lin Chia-lung affirmed Taiwan’s readiness to negotiate with the U.S. regarding tariffs at any time, underlining that discussions could address various issues, from procurement deals to non-tariff barriers. Premier Cho Jung-tai revealed plans to position Taiwan strategically in these negotiations, already initiating outreach to Washington.

Despite these proactive efforts, some analysts remain skeptical about the outcome of Taiwan's goodwill gestures. Comments from economic experts suggest that Taiwan may face challenges similar to those experienced by Switzerland, which imposes zero tariffs yet still encounters high duties from the U.S.

Market updates show that while Taiwan’s stock market has stabilized slightly after falling drastically on Monday, it suffered an additional decline of about 4% on the following day, continuing to reflect investor uncertainty amidst ongoing tariff threats. According to Dachrahn Wu, a professor at Taiwan's National Central University, the Taiwanese economy may not secure favorable tariff exemptions due to the binary nature of Trump's trade negotiations prioritizing larger economies.

Reuters reported that Taiwan's government is fully prepared with a comprehensive plan and team to conduct constructive negotiations with the U.S., echoing sentiments that further collaboration might soon be on the horizon.