Pegatron Chairman T.H. Tung welcomed the sharp reduction in US tariffs on Indonesian exports to 19%—the lowest among Asian countries to date—as a timely boost for the company's newly ramped-up production facility in Batam. He noted that the cut offers Taiwanese companies with operations in Southeast Asia a stronger foothold in global tech competition.
Tung shared his views with the media ahead of the 2025 Personal Data Protection Law Forum on July 17, where he was present in his concurrent capacity as chairman of the Monte Jade Science and Technology Association of Taiwan, a co-sponsor of the event.
Taiwan's tariff talks still pending
With Taiwan's own tariff negotiations with the US still unresolved, Tung emphasized that as Taiwan's tech industry faces global competition, securing more favorable tariff terms than its competitors would thus provide a crucial edge in the global tech race.
Taiwanese manufacturers have steadily expanded operations across Southeast Asia, including Vietnam, Thailand, Indonesia, India, and Malaysia. Vietnam, the first to finalize a reciprocal tariff deal with the US, saw its rate drop from 46% to 20%. Thailand remains at 36% and is continuing discussions to reduce that. Malaysia's rate rose slightly from 24% to 25%.
Indonesia, however, made the most dramatic move, saw its US tariff rate cut from 32% to 19%, becoming the region's most competitive in tariff terms.
Southeast Asia strategies taking shape
Among Taiwanese firms, Foxconn maintains the largest footprint in Indonesia and stands to gain the most from the competitive tariff offer. Pegatron, which expanded investment in its Batam plant earlier this year, has already entered mass production and is also poised to benefit from the favorable tariff environment.
Still, Tung described the overall outcome of tariff deals across Southeast Asia as "moderately acceptable," noting that the rates are still not far off from those of Japan and South Korea, both at 25%.
As the key elements of Taiwanese firms' Southeast Asia deployment strategies are now in place, Tung said, India will be the next region to watch closely.
Tariffs could backfire on US supply chains
Tung reiterated his long-held position that excessive tariffs will eventually raise domestic costs in the US and disrupt global supply chains, stressing that global cooperation is preferable to confrontation in the long run.
However, he warned that US tariff policies remain highly volatile, with rates changing rapidly. For Taiwan, he stressed, the best course is to continue playing a steady and crucial role as a global tech partner and supply chain provider, even if that means traditional industries may face some impact.
Green light for Nvidia's H20 AI chip exports to China
Beyond tariffs, another major development drawing attention is the recent US approval for Nvidia to export downgraded H20 AI chips to China, sparking discussion about a possible rebound in the AI market in the second half of the year.
As a key supplier to Nvidia, Pegatron stands to benefit from renewed momentum in AI demand. Tung said the US decision signals that both sides are willing to compromise and avoid a head-on confrontation in the AI sector. "There's still room for dialogue between the U.S. and China," he noted. "Taiwan is in a delicate position—quietly doing good work and being relied upon is enough."
AI market balance still in play
Tung further noted that Washington's calibrated approach may stem from concerns that overly stringent export controls could accelerate the growth of Chinese domestic competitors, ultimately threatening US leadership in the AI sector. After all, the Chinese market cannot be underestimated, with even Nvidia reluctant to relinquish it. Consequently, both sides are striving to maintain a delicate balance between supply and demand.
Article edited by Jack Wu
