What: Taiwan retail sales decline 2.9% to NT$390 billion in June, marking third consecutive monthly drop amid tariff uncertainties and shifting consumer behavior.

Why it is important: This sustained decline aligns with broader retail challenges across Asian markets, where policy uncertainties and changing consumer preferences are reshaping traditional retail dynamics.

Taiwan's retail sector continues to face significant headwinds as sales fell 2.9% to NT$390 billion in June, marking the third consecutive monthly decline. The automotive sector experienced the most substantial impact, with sales of cars, motorcycles, and related accessories dropping 17.3% year-on-year, primarily due to consumer uncertainty surrounding US tariff negotiations. The downturn extended across multiple categories, with fabric and clothing sales declining 6.3% amid fewer holidays, while department stores reported a 3.6% decrease. The food and beverage sector, previously showing three months of consecutive growth, reversed course with a 2% decline, primarily attributed to decreased restaurant sales. The cumulative impact is reflected in broader metrics, with retail sales sliding 1.6% for the second quarter and 0.4% for the first half of the year. Looking ahead, the ministry projects July retail sales to range between a 2% decline and a 1% increase, indicating continued market uncertainty.

IADS Notes: Taiwan's retail sales decline reflects broader transformative trends across Asian markets in 2025. As reported in February 2025, Hong Kong experienced a steeper 13% drop in retail sales despite increased visitor numbers, while Singapore saw a 6.7% decline, particularly affecting traditional retail categories. The impact of tariff negotiations on Taiwan's automotive sector parallels Japan's experience in June 2025, where policy changes led to a 40% decline in tax-free sales, demonstrating how trade and policy decisions significantly influence consumer behavior. The consistent pattern of category-specific challenges, notably in fashion retail where Taiwan's 6.3% decline mirrors Singapore's 18.4% drop in February 2025, suggests a regional shift in consumer priorities. This trend aligns with March 2025 data showing Japanese department stores facing sales declines between 0.8% and 1.6%, indicating a fundamental transformation in Asian retail dynamics beyond cyclical fluctuations.

Taiwan retail sales post third consecutive monthly decline