Taiwan The European Union has raised its economic growth forecast for next year, even as the return of US President-elect Donald Trump threatens to disrupt trade.

The economy is expected to grow by 3.29% in 2025, according to an estimate released Friday (November 29) by the Taipei Bureau of Statistics. This compares to the previous forecast of 3.26 percent. Gross domestic production is expected to grow by 4.27 percent in 2024, compared to an earlier forecast of 3.9 percent.

Third-quarter growth stood at 4.17 percent year-on-year, compared to the government’s earlier estimate of 3.97 percent.

Trump’s imminent return complicates the economic outlook for Taiwan, which counts China and the United States among its major trading partners. This week, Trump promised an additional 10% tax on Chinese goods in retaliation for what he said was Beijing’s failure to stop the flow of drugs to the United States.

Even without new levies, trade tensions between China and the United States “would hit Japan, South Korea and Taiwan hard,” Moody’s Analytics wrote in a note dated Sunday. The economic damage in 2025 and 2026 “will be greater in Taiwan, given its increased exposure to the United States and China,” the financial services company said in the note written by analysts including senior economist Stefan Angrick.

Moody’s also said there was reason to believe that taxes imposed on the three companies “would be modest relative to their international peers”, given that they have leverage as large investors in the United States .

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Taiwan has been one of Asia’s best-performing economies this year, driven by global demand for its high-tech products. AI leaders like Nvidia, Microsoft and OpenAI are increasingly turning to companies in the archipelago to manufacture their chips, build their servers and cool their devices.

This performance allowed the central bank to keep its benchmark interest rate at the highest level in 16 years, increase the amount of funds banks must hold in reserve and put in place a series of restrictions to calm a booming real estate market.

Taiwan is likely to keep rates stable in 2025 as the country remains “focused on managing overall financial stability,” William Deng, Asia and China economist at UBS Investment Bank, wrote in a blog post on Monday. a note.

The central bank will announce its next rate decision on December 19. BLOOMBERG