US-Taiwan trade deal locks in 15% tariffs, boosts market access
US and Taiwan sign a trade deal locking in 15% tariffs while offering significant market access and major investments in US goods.
Reuters reports that Trump administration officials have signed a trade agreement with Taiwan, confirming that the US will maintain a 15% tariff on imports from Taiwan.
In return, Taiwan has pledged to gradually remove or reduce tariffs on nearly all US imports within a specified time frame.
A statement released by the Office of the US Trade Representative (USTR) on Thursday also outlined that Taiwan would significantly increase its imports from the US between 2025 and 2029. These include:
- Liquefied natural gas (LNG) and crude oil, valued at US$44.4 billion
- Civil aircraft and engines, worth US$15.2 billion
- Power grid equipment, generators, marine equipment, and machinery for the steel industry, totalling US$25.2 billion
This reduction in tariffs places Taiwan on par with other major Asian exporters like South Korea and Japan.
Taiwanese President Lai Ching-te stated on Facebook, "This is a pivotal moment for Taiwan's economy and industries to ride the winds of change and undergo a major transformation."
He also noted that the deal will enhance economic and trade cooperation between Taiwan and the US, create a reliable industrial supply chain, and lay the foundation for a strategic partnership in advanced technology between the two nations.
Additionally, Lai revealed that Taiwan would be exempt from retaliatory tariffs on over 2,000 US-bound exports, bringing the average tariff rate on Taiwanese goods to 12.33%.
However, the deal still requires approval from Taiwan's parliament, where the opposition currently holds the majority.
The agreement also stipulates that Taiwanese companies would invest US$250 billion in the US to expand production capabilities in the semiconductor, energy, and artificial intelligence (AI) industries. Of this amount, US$100 billion has already been pledged by Taiwan Semiconductor Manufacturing Corp (TSMC).
Meanwhile, US Commerce Secretary Howard Lutnick indicated that Taiwan would guarantee an additional US$250 billion in investments in the US.
Moreover, the deal will result in Taiwan immediately lifting tariffs on numerous agricultural products from the US, which had previously been as high as 26%. This includes products like beef, dairy, and corn.
The US side also stated that under the agreement, Taiwan will eliminate non-tariff barriers for vehicles and accept US safety standards for automobiles, medical devices, and pharmaceuticals.
