TAIPEI (Reuters) -Taiwan's trade-reliant economy is expected to grow at a slower pace in 2025 than previously forecast, as uncertainty over possible U.S. tariffs weighs on growth, the statistics agency said on Wednesday.

A semiconductor powerhouse that runs a large trade surplus with the U.S., Taiwan was facing duties of 32% on its U.S. imports until U.S. President Donald Trump paused tariffs for 90 days to allow negotiations to take place.

Taiwan's gross domestic product is now expected to rise 3.1% this year, the official forecast from the Directorate General of Budget, Accounting and Statistics showed, slightly lower than the 3.14% it forecast in February.

One main uncertainty is "the outcome of U.S. trade tariff negotiations with various countries that can have a far-reaching impact on the global economy, inflation, and supply chains," it said in a statement.

It also said that weak growth in consumption and domestic investments could contribute to slowing growth.

In April, the statistics agency unexpectedly said it would raise its full-year growth forecast to 3.6% on strong tech demand.

Taiwan is a key hub in the global technology supply chain for companies such as Apple ( AAPL ) and Nvidia ( NVDA ), and home to the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd ( TSM ) .

The United States is Taiwan's second-biggest export destination after China.

Taiwan's exports this year are expected to grow by 8.99%, the agency said, upgrading a previous forecast of 7.08%.

GDP expanded by 5.48% in the first quarter, the statistics agency said, compared to a preliminary reading of 5.37%, and was the fastest rate of growth since the first quarter of 2024 when the economy expanded 6.64%.

The forecast for the consumer price index (CPI) was lowered to 1.88% from 1.94% previously.