Taiwan-US negotiation results to boost Taiwan's strategic position, support reciprocal trade deal

Premier Cho Jung-tai, accompanied by Vice Premier Cheng Li-chiun, Minister without Portfolio and Chief Trade Representative Yang Jen-ni, and Minister of Economic Affairs Kung Ming-hsin, held a press conference on Tuesday to brief the public on the outcomes in the latest stage of Taiwan-U.S. tariff negotiations, progress toward a Taiwan-U.S. Agreement on Reciprocal Trade (ART), and how the negotiation outcomes and corresponding response measures will affect Taiwan's industries.

Premier Cho emphasized that, compared with other countries, Taiwan has achieved more substantial, thorough and comprehensive results in its talks with the U.S., strengthening Taiwan's strategic position. He also expressed confidence that the negotiation team will continue its diligent efforts to finalize the Taiwan-U.S. ART.

Vice Premier Cheng highlighted that the negotiations led to consensus on four key areas, including a reduced reciprocal tariff rate of 15% exempted from stacking; a U.S. commitment to grant Taiwan most preferential tariff treatment, as well as zero tariffs within quota limits for semiconductors and their derivative products under Section 232; the signing of a Memorandum of Understanding (MOU) on investment between Taiwan and the U.S; and the planned signing of the Taiwan-U.S. ART in the coming weeks. The vice premier also expressed hope that the U.S. will swiftly ratify the Taiwan-U.S. Avoidance of Double Taxation Agreement (ADTA).

Regarding the credit guarantees and financing mechanism for Taiwanese investment in the U.S., Vice Premier Cheng noted that a national financing guarantee system has already been established under the National Development Council. Based on this system and a projected credit line of up to US$250 billion, the total required guarantee funding is estimated to range from US$6.25 billion to US$10 billion. Concerning Taiwan Semiconductor Manufacturing Company's (TSMC) investments, the government respects its plans and has long supported its expansion in Taiwan.

Vice Premier Cheng noted that the government has long promoted the motto "Taiwan can help," adding that she looks forward to a future in which "Taiwan and the U.S. can lead." She also stressed that the investment MOU's strategic objectives are to leverage a "Taiwan Model" to support the development of industries that are "rooted in Taiwan, deploying globally," and to build a high-tech democratic supply chain and further elevate strategic partnerships in artificial intelligence (AI) and mutually beneficial trade by leveraging the strengths and complementarities of both nations.

Concerning progress on the signing of the ART, Chief Trade Representative Yang stated that Taiwan and the U.S. are currently conducting the legal scrubbing of the agreement text and verifying items subject to reciprocal tariff exemptions and tariff reduction schedules. With regard to U.S. requests for Taiwan to fully open its market, she said that Taiwan's negotiating team continues to adhere to the principles of safeguarding national and industrial interests, ensuring food security and maintaining defense resilience. Once signed, she added, the agreement will help bring Taiwan's economic and trade policies into full alignment with international standards.

Economic Minister Kung stated that Taiwan has secured a 15% reciprocal tariff rate, exempt from stacking, and went on to elaborate on response measures and the effects of the new rates on various domestic industries. For the machine tool, machinery and automotive parts industries, tariff parity with competitors such as Japan and South Korea will enhance competitiveness in the U.S. market. In the bicycle, plumbing hardware and hand tools industries, Taiwan has obtained more preferential tariff rates than competitors such as China and Vietnam, strengthening its competitive advantages. Other industries, including plastic, textiles and medical devices, also enjoy tariff rates superior to those of competitors. Regarding the semiconductor industry, Minister Kung pointed out that Taiwan's information and communications technology (ICT) industry is continuing to expand globally, and he anticipates that deeper integration can be achieved in the future through two-way Taiwan-U.S. investment cooperation. He stressed that, in AI and semiconductors, the world needs Taiwan, and Taiwan needs the world, and he expressed confidence that the outcome of these negotiations will enable Taiwan to continue playing a critical role in the global high-tech sector.