Taiwan–U.S. Tariff Agreement Eases Economic Impact, Strengthens Taiwan’s Competitive Position

With the Taiwan–U.S. tariff negotiations now concluded, the Ministry of Economic Affairs (MOEA) stated that the projected impact on Taiwan’s exports, industrial output, and employment has been substantially mitigated, leaving Taiwanese manufacturers in a relatively stronger competitive position.

Deputy Minister Chin-Tsang Ho made the remarks today during a briefing to the Legislative Yuan’s Finance Committee on the economy-wide implications of the agreement.

​According to MOEA assessments, the expected impact on Taiwan’s exports to the United States has shifted from a decline of 5.75–7.5 percent to a modest increase of 0.04–0.08 percent.

Industrial output, previously projected to fall by 1.3–1.4 percent, is now expected to post marginal growth of up to 0.02 percent. The estimated drag on GDP has narrowed from as much as 0.78 percent to near zero, while industrial employment is projected to move from a loss of roughly 36,000 jobs to a net gain of 206–329 positions.

Deputy Minister Ho noted that Taiwan secured a 15 percent reciprocal tariff without stacking, improving competitive conditions for traditional industries. In the past, Taiwan’s exports to the U.S. faced higher tariffs than those from Japan and South Korea due to the absence of a bilateral trade agreement.

Machine tools, for example, Taiwan previously faced a 4 percent U.S. tariff, compared with 2.6 percent for Japan and zero for South Korea, said Deputy Minister Ho. Under the new framework, all exporters face the same 15 percent rate, creating fairer competition and supporting future export growth. MOEA added that sectors such as machinery, auto parts, bicycles, hand tools, plastics, textiles, and medical devices are expected to see improved competitiveness in the U.S. market, with several industries benefiting from more favorable rates than key rivals.

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