Preferential Section 232 Tariff Treatment Boosts Taiwan's Auto-Parts Export Outlook

CNA Reporter Rong-Feng Zhong (Taipei, 16th)

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Taiwan’s automotive components industry stands to gain from the U.S.–Taiwan reciprocal tariff agreement, under which tariffs on Taiwanese goods will be capped at 15% and applied on a non-cumulative basis. Industry leaders note a positive outcome for the competitiveness of automobile parts exports.

Taiwan trade teams suggested that the preferential treatment extends beyond semiconductors to cover automotive components, wood and furniture products, and certain aerospace parts, including steel-, aluminium-, and copper-derivatives. Taiwanese and U.S. officials also agreed to establish a standing consultation mechanism to ensure continued preferential treatment should the U.S. initiate future Section 232 investigations on additional product categories.

The U.S. Department of Commerce confirmed that reciprocal tariffs on Taiwanese goods will be set at 15%. In contrast, tariffs imposed under Section 232 on automotive components, timber, and related products from Taiwan will not exceed the same threshold.

For Taiwan’s auto-parts manufacturers, the shift is significant. Industry leaders noted that most automotive components exported to the United States fall under Section 232. As of May 3rd, these products had been subject to a 25% tariff under Section 232, on top of an existing 2.5% duty, totaling tariffs to roughly 27.5%. By contrast, competing exporters from Japan, Europe, and South Korea are taxed at 15%.

The new arrangement, therefore, narrows a substantial cost gap. Currently, aftermarket (AM) repair parts in certain corporations of the industry remain stable. Manufacturers will continue to strengthen core capabilities that are difficult for competitors to replicate, while closely monitoring market dynamics.

In the United States, Taiwanese companies are accelerating localization efforts. With ongoing capacity expansion and production line upgrades, the goal is to reinforce rapid local replenishment, shorten delivery times, and consolidate Taiwan’s aftermarket segment.