Taiwan secures 15% reciprocal tariff rate with no stacking, most preferential semiconductor treatment

On January 15 (Eastern Standard Time), Vice Premier Cheng Li-chiun and Yang Jen-ni, Chief Trade Representative at the Executive Yuan's Office of Trade Negotiations, led Taiwan's negotiating delegation in a culmination meeting with their U.S. counterparts, headed by U.S. Secretary of Commerce Howard Lutnick and U.S. Trade Representative Jamieson Greer. The meeting successfully secured various objectives, with the two sides 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).

The Cabinet's Taiwan-U.S. Economic and Trade Task Force noted that Taiwan ranks sixth among the largest sources of the U.S. trade deficit, with 90% of that deficit coming from semiconductors, information and communications technology (ICT) products and electronic components. As these goods are subject to investigation under Section 232 of the Trade Expansion Act of 1962, which concerns the restriction of imports deemed to threaten U.S. national security, Taiwan's delegation focused on negotiations covering both reciprocal tariffs and Section 232 tariffs, engaging in multiple rounds of negotiations with the Office of the U.S. Trade Representative and the U.S. Department of Commerce. These efforts culminated in the attainment of four objectives:

First, reciprocal tariff rates on Taiwanese goods were reduced from 20% to 15% and exempted from stacking with preexisting most-favored-nation (MFN) tariffs, thereby conferring treatment equivalent to other major U.S. trade-deficit partners, including Japan, South Korea and the European Union.

Second, Taiwan became the first U.S. trading partner to obtain most preferential tariff treatment for semiconductors and their derivative products for companies investing in the U.S. In addition, the delegation secured preferential Section 232 tariff treatment for automotive parts, lumber and other products.

Third, the "Taiwan Model" was put in place to guide Taiwanese companies into the U.S. supply chains, foster industrial clusters and further expand the global competitiveness of Taiwan's technology sector.

Fourth, the negotiations advanced two-way investment between Taiwan and the U.S. in high-tech industries, and ensured a Taiwan-U.S. strategic partnership in the global AI supply chain.