Premier Cho delivers remarks on outcome of US tariff negotiations

Premier Cho Jung-tai on Friday delivered remarks on the outcome of the Taiwan-U.S. tariff negotiations. The premier stated that early this morning, Taiwan time, the Taiwanese negotiating delegation led by Vice Premier Cheng Li-chiun and Chief Trade Representative Yang Jen-ni held a culmination meeting in Washington D.C. with the U.S. delegation led by Secretary of Commerce Howard Lutnick and U.S. Trade Representative Jamieson Greer. The two sides finalized arrangements concerning reciprocal tariffs, tariffs under Section 232 of the U.S. Trade Expansion Act of 1962, and investment cooperation, jointly witnessing the signing of a Memorandum of Understanding (MOU) on investment by the Taipei Economic and Cultural Representative Office in the United States (TECRO) and the American Institute in Taiwan (AIT).

Premier Cho emphasized that all four negotiation objectives pursued by Taiwan's delegation were achieved. First, Taiwan secured a reduced reciprocal tariff rate of 15%, exempted from tariff stacking and calculated using the same methodology applied to Japan, South Korea and the European Union. This represents a stepwise reduction from 32% in April of last year to 20% last July, and now to 15%, aligning Taiwan's tariff treatment with that of Japan and South Korea.

Second, Taiwanese companies that invest in semiconductors, semiconductor-derived products and other designated sectors within the U.S. will enjoy preferential Section 232 tariff treatment. In addition, the delegation secured a 15% tariff rate, exempted from stacking, for automotive parts, lumber and other products, as well as preferential Section 232 tariff treatment for various goods, including zero tariffs on steel-, aluminum- and copper-derived products used in aircraft components.

Third, in order to advance supply chain collaboration and deepen economic and trade ties, a "Taiwan Model" was established to help Taiwanese companies expand their presence in the U.S. semiconductor and information and communications technology (ICT) sectors. Under this framework, Taiwanese businesses will make direct investments of US$250 billion, while Taiwanese government-backed credit guarantees will support US$250 billion in bank financing. Investments will target areas such as the U.S. semiconductor and ICT supply chains, involving collaboration with the U.S. government to foster industrial clusters and a more favorable investment environment for Taiwanese businesses.

Fourth, the negotiations advanced efforts to promote a more balanced Taiwan-U.S. trade relationship and ensured a strategic partnership in the global AI supply chain.

Premier Cho stressed that these outcomes were not easily attained. Over the past nearly 10 months, the government has pursued intensive negotiations with the U.S., while simultaneously advancing a special statute, with the support of the Legislative Yuan, to strengthen Taiwan's resilience. Late last July, Taiwan obtained a provisional tariff rate of 20%, reduced from 32% and applied in conjunction with most-favored-nation (MFN) rates. Among nations that account for the largest U.S. trade deficits, Taiwan has now achieved most preferential tariff treatment, emphasizing U.S. recognition of Taiwan as a key strategic partner.

The premier concluded by expressing his gratitude to Vice Premier Cheng Li-chiun, Chief Trade Representative Yang Jen-ni and all of the ministries and agencies involved in the negotiations for achieving such excellent results through their dedicated collaboration. With further negotiations to follow, he urged all ministries and agencies concerned to maintain momentum and successfully advance the Taiwan-U.S. trade agreement, which will be submitted to the Legislature for deliberation, with the hope of securing support across political caucuses.