Li Jingyao
After nine months of Taiwan-U.S. tariff negotiations, the talks recently concluded with both sides agreeing to a reciprocal tariff reduction to 15 percent without stacking, and the agreement is now awaiting signature. NVIDIA CEO Jensen Huang publicly praised the negotiation results and affirmed Taiwan’s importance in the global supply chain. Given the difficulty of achieving these results, President Lai Ching-te hopes the Legislative Yuan will review the agreement professionally and according to law.
According to Central News Agency, the Taiwan-U.S. tariff negotiations concluded with a historic agreement. Taiwan successfully secured:
- Reciprocal tariff reduction to 15 percent, not stacked on the existing Most-Favored-Nation (MFN) rates;
- Most-favored treatment for semiconductors and semiconductor derivatives under Section 232 tariffs;
- Provisions for bilateral investment;
- Support for Taiwanese companies’ autonomous investment of $250 billion, with the government providing financial institutions credit guarantees up to an additional $250 billion.
The agreement is now awaiting signature under the Taiwan-U.S. Reciprocal Trade Agreement (ART).
Difficult negotiations, hope for legislative review
At a press conference for the “Taiwan-U.S. Economic Prosperity Partnership Dialogue” on Feb. 3, President Lai Ching-te stated that to further strengthen Taiwan’s industries domestically and globally, his administration will continue to focus on two goals: “deepening Taiwan-U.S. economic and trade relations” and “establishing diversified technology layouts.”
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Lai thanked the frontline negotiation team, whose tireless efforts enabled Taiwan to make significant progress. He noted that the tariff negotiations’ success is reflected not only in stock market and export performance but also in widespread recognition from the industrial sector. NVIDIA CEO Jensen Huang publicly praised the results and acknowledged Taiwan’s strategic importance in the global supply chain.
At a year-end press conference, National Development Council (NDC) Chair Yeh Junxian emphasized that on March 3, the Executive Yuan will report to the Legislative Yuan on matters such as the 15 percent reciprocal tariff reduction and MFN treatment, hoping the legislature will pass the agreement promptly, as delays could be detrimental to Taiwan’s traditional industries. Yeh warned that failure to pass the agreement could bring tariff uncertainty and Section 232 complications, which the NDC seeks to avoid through communication with the legislature.
Given the importance of economic and trade negotiations to national prosperity and public welfare, President Lai hopes the Legislative Yuan will review the Taiwan-U.S. tariff agreement professionally, legally, and beyond party lines, protecting the hard-won results.
Reciprocal benefits for both sides
On Jan. 4, at the Taiwan Yushan Technology Association year-end dinner, National Science Council Chair Wu Chengwen, representing Executive Yuan Vice Premier Zheng Lijun, said the Taiwan-U.S. side confirmed four core consensuses, including the 15 percent reciprocal tariff reduction. He noted that the negotiations were not just about numbers but were strategic dialogues based on mutual benefit.
Wu highlighted that Taiwan controls over 90 percent of global AI and semiconductor manufacturing capacity, a key leverage point that earned respect from the U.S. during negotiations. He explained that the U.S. understands Taiwan’s industries cannot relocate overnight, so discussions were essentially about making Taiwan safer while ensuring U.S. industries maintain strength. He sees strong opportunities for both sides to create greater value.
Three strategic directions for future Taiwan-US cooperation
President Lai outlined three future strategic directions for Taiwan-U.S. cooperation:
- Strengthening “Economic Security” – AI, semiconductors, and other high-tech industries will increasingly prioritize safety, trustworthiness, and resilience, while accelerating the development of non-Red (non-China-dependent) supply chains in response to geopolitical shifts.
- Building an “Innovation Economy” – Taiwan has world-class manufacturing capabilities, and the U.S. has irreplaceable innovation ecosystems, core technologies, and global market connectivity. Collaboration can create strategic complementarity and mutual prosperity.
- Developing a “Prosperous Future” – This year’s EPPD (Economic Prosperity Partnership Dialogue) covered a wide range of topics, including AI supply chains, digital infrastructure, critical minerals, drone supply chains, and third-country cooperation. The results show that Taiwan-U.S. cooperation is multi-dimensional and cross-sectoral, not limited to a single industry. Both sides have become key partners for a “prosperous future.”
Taiwan becomes the US’s 4th largest trade partner
The tariff reductions are expected to further boost Taiwan’s exports to the U.S.
At the Trade Bureau’s annual press conference on Feb. 3, it was announced that according to U.S. Customs statistics from January to October last year, Taiwan has become the U.S.’s fourth-largest trading partner, behind Mexico, Canada, and China, reflecting deepening Taiwan-U.S. economic relations.
Deputy Director Chen Peili noted that Taiwan’s total trade exceeded $1 trillion for the first time last year, reaching $1.1244 trillion, with exports hitting a record $640.8 billion. Exports are expected to rise further to $660 billion this year.
To strengthen Taiwan-U.S. supply chain partnerships, beyond the recent EPPD meetings, Taiwan also signed Memorandums of Understanding (MOUs) with 13 U.S. states—including Texas, Arizona, and Florida—to help businesses expand trade and investment opportunities and optimize the investment environment. Last year, over 140 Taiwanese companies attended the “SelectUSA Investment Summit,” forming one of the largest delegations globally; another delegation is planned for May 3–6 this year.
Director Liu William said the Taiwan-U.S. Economic Prosperity Partnership Dialogue (EPPD) follow-up working group will continue to operate this year, diversifying global markets and assisting companies in setting up overseas production bases.
The 15 percent tariff reduction has reportedly eased many businesses. According to Business Weekly, at the Jan. 20 Annual Outlook press conference of the Machine Tool Association, company executives were smiling, and Chairman Chen Shenteng revealed that about 60 percent of members expect 5–10 percent revenue growth in 2026, with U.S. export sales increasing by 6–8 percent. However, some companies still emphasized product upgrades as the top priority, even after the tariff reduction.
