Taiwan Leverages Industrial Strength in US Tariff Negotiations

President Lai Ching-te said Taiwan’s technological and industrial prowess was a decisive factor in securing favourable terms in tariff negotiations with the United States, arguing that the investment commitments involved were significantly smaller and more autonomous than Japan and South Korea.

The talks concluded on January 15 (US Eastern Time), with both sides agreeing to set Taiwan’s reciprocal tariff rate at 15% non-stack. Taiwan also obtained preferential treatment under Section 232 for semiconductors and related products, alongside commitments on two-way investment. These include US$250 billion in investments to be undertaken voluntarily by Taiwanese firms, supplemented by up to a further US$250 billion in corporate credit lines backed by government guarantees. The deal awaits the signing of an Agreement on Reciprocal Trade (ART).

President Lai said Taiwan’s approach differed from that of Japan and South Korea, which pledged US$550 billion and US$350 billion, respectively, in investments largely determined by the United States. By contrast, Taiwan retains control over investment selection.

The reduction in tariffs, from around 21.5–25% to 15%, is expected to provide meaningful relief to exporters of hand tools, machinery, and automotive components, particularly small and medium-sized firms. President Lai noted that the new rate places Taiwan on equal footing with regional competitors such as Thailand and Vietnam.

He added that reciprocal investment, including prospective US investment teams in Taiwan, should help narrow the bilateral trade imbalance and deepen industrial co-operation between the two economies.