U.S.-Taiwan Tariffs Set at 15%, Putting Machine-Tool Makers on Par with Global Rivals

Taiwan and the United States announced on Friday that reciprocal tariffs will be capped at 15%, applied on a non-cumulative basis. Taiwan Association of Machinery Industry (TAMI) and industry leaders of the machine tool industry described the move as a meaningful step toward leveling the competitive landscape for Taiwanese manufacturers against peers in Japan, South Korea, and Europe, though currency movements are now emerging as the decisive factor in outsourcing competitiveness.

Taiwan’s Executive Yuan said the agreement secures preferential tariff treatment for semiconductors and related products, expands supply chain investment, and deepens bilateral industrial cooperation. The trade team added that the arrangement aligns Taiwan’s tariff position with that of its main competitors in advanced manufacturing.

For traditional export sectors such as machine tools and hand tools, the adjustment offers tangible relief. According to the Taiwan Machine Tool & Accessory Builders’ Association (TMAB), a provisional 20% tariff introduced in August had been layered on top of existing most-favoured-nation rates, 3.3–4.2% for machining centres, 4.2, 4.4% for lathes, and about 8% for components.

David Chuang, chairman of the Taiwan Association of Machinery Industry (TAMI), said the 15% rate effectively restores parity. “Everyone is starting from the same line,” he noted. Companies that built inventory in the United States ahead of the tariff adjustment, he added, will enjoy a short-term pricing advantage as they clear stock at lower landed costs.

Attention is now shifting to exchange rates. Chairman Chuang argued that relative currency movements will shape order competitiveness and hopes to narrow gaps between overseas rivals. He said the industry is targeting output growth of 5–10%, with a recovery expected in the second quarter.

Edward Yang, chairman and president of Goodway Machine Corp., also agreed that tariffs are only part of the equation. The United States remains Taiwan’s largest export market, largely due to its demand for high-precision machine tools. While Japan, South Korea, and Europe remain formidable competitors, Mr. Yang said that, once tariff conditions stabilize, competition will hinge on technology, manufacturing capability, service quality, and overall value. Currency fluctuations, however, will continue to influence order structures, cost allocation, and profitability.