Taiwan Unleashes $15 Billion Fund to Rescue Plunging Stocks Amid Tariff Chaos

U.S. Tariffs Trigger Market Panic, Prompting Urgent Stabilization Measures

Taiwan’s government has authorized the deployment of its massive $15 billion National Stabilization Fund to bolster the nation’s stock market, which has been reeling from a dramatic sell-off sparked by newly imposed U.S. tariffs. This bold move comes as the Taiwan Stock Exchange grapples with unprecedented volatility, with the benchmark index plummeting nearly 10% in a single day and sliding further to a 14-month low. The decision underscores the urgency of countering the economic fallout from President Donald Trump’s 32% tariffs on Taiwanese imports, a policy that has rattled investors and intensified global market fears.

The Ministry of Finance, overseeing the $15.15 billion fund (approximately T$500 billion), has cleared it to intervene directly in the Taiwan stock market stabilization efforts. This strategic action aims to restore investor confidence and curb the steep declines that have erased billions in market value. With foreign investors offloading holdings since the year began and a "strong international panic atmosphere" gripping the financial landscape, Taiwan’s government is pulling out all stops to safeguard its economic stability.

U.S. Tariffs Ignite Taiwan Stock Market Crisis

The turmoil began when the U.S. announced a 32% tariff on Taiwanese goods, targeting the island nation’s substantial trade surplus with America. Unveiled just days ago, this policy sent shockwaves through Taiwan’s financial ecosystem, culminating in a historic market drop. On Monday, the first trading session following a holiday break, the Taiwan Stock Exchange Index (TAIEX) plunged 9.7%, marking its largest single-day decline ever recorded. The following day saw an additional 4% slide, pushing the index to its lowest point in over a year. Trading volume shrank to a two-year low of $4.46 billion (T$166 billion), reflecting a broader retreat from the market that saw the TAIEX fall 21% from its mid-July 2024 peak of 24,416 points to 19,232 points.

This tariff-driven crisis has exposed vulnerabilities in Taiwan’s export-reliant economy, amplifying concerns among investors already wary of global trade tensions. The Ministry of Finance highlighted the role of foreign investor sell-offs, noting that these outflows have destabilized the market since early 2025. With 1,702 listed companies hitting their daily loss limits on Monday alone, surpassing even the 2008 financial crisis, the government faced mounting pressure to act swiftly and decisively.

National Stabilization Fund: Taiwan’s $15 Billion Lifeline

In response, the Ministry of Finance activated the National Stabilization Fund, a financial war chest established in 2000 to shield Taiwan’s stock market from extreme volatility. Valued at T$500 billion ($15.15 billion), this fund is now poised to execute targeted Taiwan stock market stabilization measures. Its mandate allows it to step in during domestic or international crises that threaten public confidence or disrupt market operations, a role it has played effectively in the past, such as during the COVID-19 pandemic.

Reports indicate that the fund’s steering committee convened a special meeting to strategize its intervention, potentially deploying its full $15.15 billion arsenal to temper the ongoing sell-off. While specific actions remain under wraps, the Ministry emphasized that short-term fluctuations are expected but urged investors to assess market fundamentals rationally. The fund’s historical track record offers hope: between July 2022 and April 2023, it invested $1.65 billion (T$54.51 billion) to counter U.S. Federal Reserve rate hike fallout, yielding a 20.7% return and lifting the TAIEX by over 10%. This precedent suggests that the current authorization could significantly influence Taiwan stock market recovery efforts, though analysts caution that the scale of today’s crisis may pose unique challenges.

The Ministry remains optimistic, suggesting that the market will eventually stabilize as it realigns with economic fundamentals. To bolster this effort, the government has also introduced temporary short-selling curbs, effective for the week, while the Taiwan Stock Exchange has pledged additional stabilization policies if necessary. Listed companies are being encouraged to enhance transparency and pursue share buyback programs to further support the market.

Historical Interventions and Future Outlook for Taiwan Stock Market Stabilization

The National Stabilization Fund’s past successes provide a blueprint for its current mission. During its 2022-2023 operation, the fund not only mitigated volatility but also delivered impressive returns, demonstrating its capacity to navigate complex global pressures. Today’s authorization, however, dwarfs previous efforts, with $15.15 billion at its disposal compared to the $1.65 billion deployed earlier. This escalation reflects the gravity of the tariff-induced downturn and the government’s commitment to reversing it.

To illustrate the fund’s potential impact, consider this comparative analysis of recent interventions:

Period	Intervention Amount ($ billion)	Market Impact (TAIEX Change)	Return on Investment
July 13, 2022 - Apr 13, 2023	1.65	+13.29%	20.7%
April 2025 (Authorized)	15.15	TBD	TBD

This table underscores the unprecedented scale of the current authorization, highlighting its potential to reshape the Taiwan stock market outlook for 2025. However, the effectiveness of these measures hinges on multiple factors, including the duration of U.S. tariff pressures and global economic responses.

Broader Implications for Investors and Taiwan’s Economy

The activation of the National Stabilization Fund signals more than just a market rescue; it’s a calculated move to protect Taiwan’s economic standing amid escalating trade tensions. As a key player in global supply chains, particularly in semiconductors, Taiwan’s market stability carries ripple effects worldwide. The 32% U.S. tariffs threaten to disrupt this role, making the fund’s intervention a critical buffer against long-term damage.

For investors, the fund’s involvement offers a glimmer of hope amid the chaos, though uncertainty lingers. Market analysts suggest that while the $15.15 billion infusion could halt the freefall, restoring pre-tariff confidence may require broader diplomatic or economic resolutions. The Taiwan Stock Exchange, meanwhile, is doubling down on transparency and resilience, urging companies to align with stabilization efforts. Whether these combined actions can steer the market back to its July 2024 highs remains an open question, but the government’s proactive stance has undeniably shifted the narrative from panic to cautious optimism.

Taiwan’s history of leveraging the National Stabilization Fund during crises like COVID-19 reinforces its reputation for resilience. Today’s challenge, driven by external trade policies rather than internal shocks, tests this resilience anew. As the fund gears up for action, all eyes are on its ability to navigate this tariff storm and secure a stable future for Taiwan’s financial markets.

Key Citations

• Taiwan stocks plummet in biggest one-day drop on record after US tariffs
• Taiwan Stock Exchange sees record single-day drop of 9.7%
• Stabilization fund could hold special meeting to ease volatility
• TAIEX slumps 9.7% on Trump’s tariffs
• Stabilization fund earns high return from latest market intervention
• Taiwan announces temporary short-selling curbs after US tariffs
• Taiwan Stocks Plummet, Exchange to Take More Stabilisation Steps if Needed