BUILDING A SHOCK-PROOF TAIWAN

Global trade and geopolitics in 2025 remain marked by profound uncertainty. Geoeconomic competition and heightened strategic tensions have reshaped the operating environment for multinational companies. Meanwhile, governments are reevaluating trade and industrial policies to reflect shifting priorities in national security, economic self-reliance, and technological leadership.

Against this backdrop, Taiwan’s economic stability, democratic governance, and leadership in critical industries continue to position it as a trusted and strategic partner. As one of the world’s wealthiest economies by net financial assets per capita, Taiwan plays an outsized role in the global economy. Outstandingly, it is the leading producer of advanced semiconductors, accounting for more than 90% of cutting-edge chip manufacturing.

Taiwan consistently ranks among the top jurisdictions worldwide for patent applications and innovation output. Its high-tech industries, robust export performance, and strong rule of law have made it a cornerstone of global supply chains and an essential partner in sectors ranging from electronics and healthcare to green energy and artificial intelligence. However, staying competitive in this evolving global landscape will require flexible and forward-looking policy formation.

Over the past year, the government has intensified its efforts to bolster Taiwan’s ability to withstand disruptions and navigate an increasingly uncertain world. In a notable show of commitment, President Lai Ching-te has established three new interrelated committees under the Presidential Office, connected by the theme of national resilience: the National Climate Change, Healthy Taiwan Promotion, and Whole-of-Society Defense Resilience Committees.

These high-level bodies signal a comprehensive approach to fortifying Taiwan’s future by integrating climate strategy, public health, and defense preparedness into a cohesive framework. Strengthening Taiwan to proactively deal with challenges and deepen cooperation with the international community helps institutionalize resilience as the guiding principle of national policy. This outlook sets the tone for Taiwan’s strategic priorities in 2025 and beyond, with an emphasis on reinforcing critical systems, preserving economic vitality, and enhancing partnerships with like-minded nations.

Beyond resilience, Taiwan is increasingly positioned to help shape global solutions and set new standards across strategic sectors. The 2025 Taiwan White Paper reflects this ambition, with committee chapters highlighting Taiwan’s leadership in areas such as digital regulation, semiconductor policy, and intellectual property reform.

Businesses play an indispensable role in building both societal resilience and prosperity. As employers, innovators, and providers of essential goods and services, companies support livelihoods, public health, and national security. They also serve as pivotal partners in infrastructure development, digital transformation, and environmental sustainability. Their investments generate growth while helping Taiwan remain agile and resilient in the face of global shocks. Therefore, including industry in national efforts to bolster resilience and ensure future competitiveness is essential.

Over the past year, Taiwan has made headway in areas such as stakeholder engagement, digital transformation, infrastructure development, and healthcare planning. But progress has been uneven, and high-level commitments have yet to yield consistent, measurable results.

Of the 97 issues identified in the 2024 Taiwan White Paper, 9 have been fully resolved. While 25% of issues raised in 2023 showed some advancement – either resolved or indicating good progress – just 10% did so among those raised in 2024. Roughly half remain under observation, and a quarter are stalled or unaddressed. More decisive action is needed to fortify Taiwan’s long-term competitiveness and systemic stability.

As global trade tensions mount and geopolitical risks intensify, Taiwan faces growing pressure to prove itself as an open, adaptable, and globally competitive economy. Beyond supporting Taiwan’s whole-of-society resilience agenda, the practical recommendations from AmCham’s industry committees remain essential to strengthening the business climate and sustaining investor confidence.

Aligning Taiwan’s regulatory framework with international standards remains an instrumental step in enhancing national and economic resilience. As global supply chains become increasingly scrutinized and cross-border operations more complex, a predictable, transparent, and internationally harmonized regulatory environment will strengthen Taiwan’s ability to attract high-quality investment and sustain its influential role in global commerce.

At the same time, Taiwan should actively pursue opportunities to lead in regulatory innovation, particularly in sectors where it holds a global advantage – such as semiconductors – and in emerging fields where it seeks to build competitiveness, including renewable energy and digital technologies. By establishing clear, forward-looking benchmarks, Taiwan can bolster its reputation as a standards-setting, globally minded economy.

AmCham committees continue to highlight areas where Taiwan’s regulatory practices diverge from international expectations, posing operational challenges for multinational enterprises. By adopting global best practices, Taiwan can ensure that its regulatory systems are adaptable, credible, and conducive to long-term economic security.

REGULATORY MODERNIZATION

Regulatory alignment with international standards has long been one of the Chamber’s most consistent recommendations. Yet critical gaps persist in areas such as safe harbor principles for digital platforms, timely stakeholder consultation, and predictable review processes for healthcare technologies. Taiwan’s frameworks often lag behind global best practices, creating compliance risks and delaying access to innovation.

Adequate public notice of proposed regulations – along with a platform for stakeholder feedback – is a cornerstone of good regulatory practice. Transparent processes that prioritize accountability and invite meaningful public input are essential to preserving the integrity of governance. Notice-and-comment procedures must be supported by meaningful communication as implementation details are finalized. When followed faithfully, this process strengthens outcomes and builds trust among regulators, businesses, and the public.

Taiwan’s 60-day notice-and-comment mechanism, introduced in 2016 at AmCham’s urging, was a welcome step forward but has fallen short in practice. Many regulations are implemented without sufficient notice, largely due to the narrow scope of the executive orders, which restrict the rule’s application to international trade, investment, or intellectual property. As a result, domestic rules with significant cross-border implications are excluded.

Further undermining the process is an exemption allowing the rule to be bypassed in “emergency” situations. Frequent invocation of this clause has eroded its legitimacy. AmCham urges the government to clarify the definition of emergencies, eliminate the trade-related carveout, and strengthen oversight to preserve the rule’s intent.

Reinforcing the 60-day consultation period as a universal requirement – paired with early publication of bilingual versions and standardized proposal templates – would make the process more open, predictable, and inclusive. The Chamber has raised these concerns with the National Development Council, emphasizing the need for rigorous implementation of consultation protocols.

Unlike in the United States, where legislation often originates in Congress, most bills in Taiwan are drafted within the Executive Yuan. Applying the 60-day consultation period during the drafting stage would improve regulatory quality. Early involvement of AmCham members and other international stakeholders would ensure new rules reflect practical industry insight.

Ongoing dialogue with foreign businesses can enrich policymaking, drawing on global expertise and proven benchmarks to strengthen Taiwan’s regulatory foundation. Their participation supports regulatory transparency, alignment with international norms, and Taiwan’s reputation as a stable, attractive investment destination.

AmCham calls on the Executive Yuan to prioritize rulemaking reforms, including strict adherence to the 60-day comment period and broader application beyond trade- or intellectual property-related regulations. Overuse of the emergency exception undermines transparency. More inclusive legislative drafting, supported by bilingual drafts and early-stage stakeholder briefings, would significantly improve regulatory outcomes.

WHOLE-OF-SOCIETY IMPLEMENTATION

Building a more antifragile Taiwan will require broader improvements across the economy, including:

Critical infrastructure. Critical infrastructure resilience remains fundamental to Taiwan’s economic security, technological leadership, and societal stability. The Chamber urges the government to take a more coordinated, future-oriented approach to reinforcing digital, energy, and communications infrastructure. The Executive Yuan should consider establishing a cross-agency task force to identify infrastructure bottlenecks, streamline planning and procurement, and align infrastructure development with national resilience goals.

Taiwan must prioritize modernization of its grid infrastructure, particularly through investments in energy storage, demand response systems, and renewable integration. A transparent, cost-reflective pricing mechanism is essential to enable efficient procurement and sustained investment in energy infrastructure. Infrastructure resilience also depends on reforming public procurement processes to improve administrative efficiency, prevent retroactive requirements, and minimize project delays.

Digital infrastructure – including internet data centers and cloud service providers – forms the backbone of Taiwan’s AI-driven transformation. To safeguard national assets and digital sovereignty, Taiwan must implement robust cybersecurity protections, such as Zero Trust Architecture, and adopt secure cloud procurement policies aligned with international standards.

Telecommunications infrastructure must also be strengthened. The Chamber reiterates its recommendation for government acquisition of a dedicated submarine cable repair vessel to address recent repeated cable disruptions. The creation of unified access and usage guidelines for public infrastructure assets, such as utility poles, rooftops, or underground conduits, would establish clear, consistent rules for how telecom providers can access shared infrastructure. This would in turn help accelerate 5G rollout and enhance network resilience, particularly in underserved areas.

Taken together, these actions will help Taiwan develop an integrated, future-proof infrastructure system that can withstand both chronic and acute shocks while supporting national development and cross-sector competitiveness.

Defense. In national defense and economic security, Taiwan must continue balancing strategic autonomy with openness to international cooperation. The Lai administration’s commitment to raising annual defense spending to at least 3% of GDP is a commendable example of sustained action.

AmCham Taiwan supports efforts to strengthen Taiwan’s domestic defense capabilities but is concerned about recent changes to the government’s Industrial Cooperation Policy, which could discourage foreign companies from participating. Specifically, the rules are unclear about what kinds of investments or technology-sharing companies are expected to provide in return for defense contracts (commonly known as offsets). The policy currently excludes indirect contributions – such as training, research partnerships, or local supply chain development – and asks for commitments before contracts are finalized, which increases risk and uncertainty for potential partners.

The Chamber urges a recalibrated approach that offers predictability, safeguards commercial viability, and encourages long-term investment in Taiwan’s defense-industrial base. Recommendations include reinstating a minimum offset percentage, introducing limited indirect offsets aligned with national priorities, and ensuring confidentiality in offset cost disclosures. Additionally, offset agreements should be timed to coincide with final contract execution under the U.S. Foreign Military Sales framework to reduce pre-award risk.

Beyond procurement, Taiwan’s defense resilience depends on strengthening dual-use supply chains. The Chamber supports ongoing efforts to localize the production of key components, diversify suppliers, and improve cybersecurity standards for defense-related ICT systems. Close cooperation between the private sector and national security agencies will be essential to identify vulnerabilities and implement cost-effective safeguards.

Digital policy. Taiwan has made commendable strides toward becoming an AI island and is laying the groundwork for quantum technology development. Government investment in edge computing and AI data infrastructure has positioned Taiwan to lead in high-performance applications and smart manufacturing. However, the absence of clear, risk-based regulations for AI deployment, overlapping agency oversight, and inconsistent treatment of cloud infrastructure hinder private sector participation.

Committee recommendations in this year’s White Paper emphasize the need for a centralized digital governance framework under the Executive Yuan to harmonize the fragmented regulatory landscape. A principles-based supervision model is fundamental for emerging technologies such as AI, where over-regulation could stifle innovation while under-regulation exposes Taiwan to reputational and security risks. Specifically, AmCham industry committees have called for safe harbor protections for intermediaries, adoption of the Manila Principles on Intermediary Liability, and enhanced due process for user data requests. Without urgent reforms, Taiwan risks undermining both its democratic credibility and digital competitiveness.

The Chamber also highlights growing concern among international cloud service providers about infrastructure cost burdens and regulatory uncertainty. Changes to electricity pricing and the lack of tailored policies for data centers may deter future investment in Taiwan’s cloud ecosystem. AmCham recommends developing a long-term national strategy for internet data centers, including performance-based standards for cybersecurity, sustainability, and grid integration.

Energy and infrastructure. Clean energy is central to the economy of the future. Although the government has taken steps to improve the renewable energy permitting process, stabilize electricity pricing, and modernize procurement practices, implementation delays and fragmented oversight still undermine investor confidence. Policy inconsistency, such as sudden changes to local content requirements or auction rules, has led some companies to pause or withdraw investment plans.

The Chamber reiterates its recommendations to streamline approval processes, improve regulatory transparency, and ensure fair market access for foreign contractors. Cross-ministerial coordination remains inadequate, especially for large-scale renewable energy and grid projects. Establishing a centralized platform to coordinate between central and local authorities, along with project-specific technical task forces, would greatly enhance execution.

The Chamber commends and supports Taiwan’s goal of net-zero carbon emissions by 2050 and notes that within the renewable energy space, grid congestion and uncertainty around transmission capacity continue to delay project deployment. Developers have cited the absence of a clear and enforceable queueing system for grid access. Furthermore, the energy storage system market, once viewed as a pillar of grid resilience, is now suffering from pricing volatility and unclear investment signals. The Chamber urges the Ministry of Economic Affairs to adopt a more transparent and predictable framework for storage participation in ancillary services markets, including time-bound targets, baseline pricing models, and auction design reform.

Healthcare. Taiwan has made admirable strides toward a more open and collaborative regulatory environment in the healthcare sphere. The creation of the new presidential-level Healthy Taiwan Promotion Committee has provided a valuable forum for dialogue, and the Chamber acknowledges growing receptiveness among health authorities to engage with stakeholders.

Nonetheless, more needs to be done to improve the timeliness of drug and device approvals, expand National Health Insurance coverage for innovative treatments, and strengthen Taiwan’s biomedical export potential. Regulatory alignment, predictable pricing mechanisms, and data-driven policy frameworks are essential for ensuring the sector’s strategic durability. Taiwan’s healthcare spending reached 7.8% of GDP in 2023 – a marked improvement from 6.6% in 2022, but still below the 2023 OECD average of 9.2%. The shortfall is especially concerning given Taiwan’s growing shortage of hospital nursing staff.

The Chamber calls for institutionalized public-private partnerships, evidence-based reimbursement reform, and alignment with international regulatory best practices to enhance system resilience and position Taiwan as a regional leader in biomedical innovation. Stakeholders continue to recommend adoption of a formal performance monitoring mechanism for the Healthy Taiwan initiative to track indicators related to population health, access to innovation, and system responsiveness.

Investment in mental health and chronic disease prevention remains insufficient relative to Taiwan’s aging population and projected care needs. Greater integration of digital health tools into the National Health Insurance system, including remote monitoring and AI-driven decision support, would alleviate clinical bottlenecks while supporting healthy aging.

The Chamber also urges broader use of balance billing mechanisms for novel devices and reform of the health technology assessment process to better accommodate value-based evidence. The Taiwan Food and Drug Administration’s pace of reform in aligning with the Medical Device Single Audit Program and eliminating redundant documentation continues to be too slow. Meanwhile, limited use of horizon scanning and prospective budgeting by the National Health Insurance Administration impedes access to new therapies.

Further recommendations include the adoption of a patient-centric multimorbidity care network and risk-based stratification for chronic disease management, supported by increased screening for such high-risk groups as individuals with kidney disease and metabolic conditions. For elderly populations, targeted interventions can improve early detection of chronic diseases and continuity of care. Public health resilience would also benefit from stronger immunization infrastructure, including increased vaccine funding, integrated data systems, and updated access strategies for adults and children.

In smart healthcare, the government should accelerate adoption by expanding incentives, reimbursement, and trial programs that support telemedicine, home care platforms, and AI-driven decision support. Likewise, continued investment in cancer screening and timely access to innovative treatments through the Cancer Drug Fund will be critical to improving long-term outcomes. These combined measures will help ensure a more equitable, efficient, and resilient healthcare system capable of withstanding future demographic and epidemiological pressures.

Talent. On labor and talent policy, demographic pressures and skill shortages demand bold and coordinated solutions. The Chamber welcomes initial steps to improve work permit transparency and digitalize application processes. However, persistent administrative barriers, rigid employment classifications, and slow integration of foreign professionals undermine Taiwan’s global competitiveness. Several committees have reported significant delays in onboarding due to unpredictable visa and document authentication procedures.

To address these gaps, we suggest adoption of a flexible employment framework, broader recognition of foreign credentials, and streamlined entry for dependents. A more inclusive labor market and efficient talent pipeline are fundamental to sustaining economic growth. Additionally, AmCham urges the government to develop a unified national talent strategy to align education and workforce development policies with industry needs, including expanded support for STEM education, vocational retraining, and digital literacy.

The government is also encouraged to improve inter-agency coordination on labor and talent policy. Introducing tiered processing timelines, automatic case status notifications, and pre-verified employer programs would significantly reduce administrative burdens and signal that Taiwan is serious about attracting and retaining global talent.

BOLSTERING U.S. RELATIONS

The United States remains Taiwan’s most important economic partner. While the change in U.S. administration introduces new dynamics, Taiwan must remain proactive in pursuing a comprehensive and reciprocal trade agreement. Measures should be taken to advance shared economic interests and create goodwill in Washington but also strengthen Taiwan’s own economic resilience by deepening access to the U.S. market, reinforcing supply chain security, and demonstrating Taiwan’s commitment to high-standard trade practices.

At the same time, Taiwan should continue to press for meaningful engagement on tariff relief and expedite preparations for a double taxation avoidance agreement. The passage of enabling legislation by the U.S. House of Representatives is a promising development, but securing Senate approval and finalizing a reciprocal framework will require sustained, proactive engagement.

The Chamber also encourages more structured bilateral engagement through working groups and public-private dialogues on areas such as supply chain security, digital trade, and regulatory cooperation. As Taiwan and the United States deepen their commercial and strategic alignment, institutionalized consultation mechanisms will be vital to sustaining progress and managing relations.

LOOKING AHEAD

The government has taken important steps to place resilience at the center of national strategy, but these must be matched by concrete, innovative, and sector-specific implementation. The Chamber urges the administration to act decisively on committee recommendations and ensure that high-level policy visions are realized through measurable, timely, and inclusive reforms.

AmCham remains committed to supporting Taiwan’s long-term success. Through constructive dialogue and close collaboration with government stakeholders, we look forward to advancing practical solutions that build an open, secure, and globally competitive Taiwan.