Taiwan stocks plummet in biggest one-day drop on record after US tariffs

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Benchmark Taiwan stock market index drops almost 10% as trading returns

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Taiwan president takes to X to promise shared prosperity with US

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Market had been closed on Thursday and Friday for holiday

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Circuit breakers triggered for TSMC, Foxconn

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Taiwan imposes short selling curbs to last all week

(Adds comments from stock stabilisation fund, paragraph 4)

By Roger Tung and Faith Hung

TAIPEI, April 7 (Reuters) - Taiwan stocks plummeted almost 10% on Monday, the biggest one-day percentage fall on record, in the first trading since U.S. tariffs were announced last week, with Taiwan's president taking to X to pledge a "golden age" of shared prosperity with the U.S.

Taiwan, hit with a 32% duty, was singled out by U.S. President Donald Trump as among the U.S. trading partners with one of the highest trade surpluses with the country.

After resuming trade on Monday following market holidays on Thursday and Friday, Taiwan's benchmark stock index plunged to its lowest level in more than a year.

Taiwan's government-run National Stabilisation Fund, which has some T$500 billion in assets that can bolster Taiwan stocks at times of crisis, said in a statement it could "not rule out" response measures to restore confidence and calm, adding that at present short-term market fluctuations were inevitable.

Taiwan on Friday announced a T$88 billion ($2.65 billion) support package for companies hit by the tariffs, while President Lai Ching-te said on Sunday the island would buy more from and invest more in the United States, with the aim of a zero-tariff regime between the two.

Writing in English on his X account on Monday, Lai reiterated he did not seek retaliatory tariffs and that "we'll start talking from bilateral 'zero tariffs'."

"To ensure Taiwan's competitiveness, we'll increase US imports & adopt other measures. Working together, we'll usher in a golden age of shared prosperity," he added.

Taiwan has long sought a free trade deal with the United States.

While semiconductors, Taiwan's main manufacturing strength, are not included in Trump's tariffs, Taiwan has a trade-dependent economy highly reliant on its part in the global electronics supply chain for everything from smartphones to cars.

Shares in chipmaker TSMC and electronics maker Foxconn both fell near 10%, triggering the 10% circuit breaker in the Taiwan market.

"The panic selling pressure is very high," said Venson Tsai, an analyst at Cathay Futures in Taipei. "This is a problem of market confidence."

Taiwan's top financial regulator on Sunday announced it would impose temporary curbs lasting all this week on short-selling of shares to help deal with potential market turmoil from the tariffs.

Speaking to reporters shortly after the market opened, Taiwan Stock Exchange Chairman Sherman Lin said it would coordinate with the financial regulator to take further stabilisation steps if needed.

The stock exchange will maintain flexibility in stabilisation measures this week to handle volatility stemming from new U.S. import tariffs, Lin added.

He said it would be hard for Taiwan to escape the market impact of the tariffs, but called on investors to have confidence in Taiwanese companies and the government.

Allen Huang, a vice president of Mega Financial's securities investment unit, said in a worst-case scenario, the chance of a recession could be higher than 50%.

"We're not expecting Trump to change his policy in the near term," he said.

Goldman Sachs downgraded Taiwan to "underweight" in its Asian market allocations on Sunday, citing high exposure to U.S. exports and market sensitivity.

($1 = 33.2020 Taiwan dollars) (Reporting by Roger Tung and Faith Hung; Additional reporting by Yimou Lee and Jeanny Kao; Writing by Ben Blanchard; Editing by Kim Coghill, Jamie Freed and Toby Chopra)