By Li Jingyao, Vision Times
Taiwan has reached a major breakthrough in trade negotiations with the Trump administration in Washington, signing a new “reciprocal trade agreement” that significantly lowers tariff burdens on Taiwanese exports while bolstering Taiwan’s position in key strategic industries.
Under the newly signed U.S.–Taiwan Reciprocal Trade Agreement (ART), Taiwan’s reciprocal tariff rate will be reduced from “32 percent + MFN” to a flat “15 percent non-stacked” rate. Taiwan also secured the most favorable treatment under Section 232 tariffs, along with exemptions for 2,072 products exported to the United States.
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The agreement comes as President Lai Ching-te announced the creation of a new “National Economic Strategy Guidance Group,” signaling a broader push to upgrade Taiwan’s economic structure amid intensifying global competition and geopolitical pressure.
Key trade talks
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According to Taiwan’s Executive Yuan, Vice Premier Cheng Li-chun and her negotiation team met on February 12 in Washington, D.C. with U.S. Trade Representative Ambassador Jamieson Greer’s delegation, reaching consensus on the ART. The signing was witnessed by Taiwan’s representative to the United States Yu Tai-yu and AIT Washington headquarters executive director Ingrid Larson.
Cheng called the deal a substantive breakthrough, noting that average tariffs on Taiwanese exports to the U.S. dropped sharply from 35.7 percent to 12.33 percent, placing Taiwan on equal footing with competitors such as Japan and South Korea in both semiconductors and traditional industries.
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She also emphasized the importance of securing exemptions for 2,072 product categories, including machine tools, industrial equipment, plumbing hardware, and bicycles — sectors that have long faced disadvantages due to Taiwan’s lack of a formal free trade agreement with Washington.
The Executive Yuan’s working group said negotiations achieved six major goals:
- Securing optimal reciprocal and Section 232 tariff treatment
- Ensuring food security and defense-industrial resilience
- Protecting public health through science-based international standards
- Improving transparency and business convenience in bilateral trade
- Strengthening economic security through trusted supply chains
- Expanding two-way investment and deepening high-tech strategic partnership
Lai launches new economic strategy group
On Feb. 13, President Lai held a high-level national security meeting at the Presidential Office following the trade deal’s announcement, accompanied by Vice President Hsiao Bi-khim, Premier Cho Jung-tai, Presidential Secretary-General Pan Men-an, and National Security Council Secretary-General Joseph Wu.
Lai said the agreement achieved six major objectives and represented five historic breakthroughs. He outlined three major directions for Taiwan’s next phase of economic transformation, including:
- Developing a more resilient long-term growth model
- Supporting Taiwanese industries investing in the U.S. to form industrial clusters
- Integrating Taiwan’s semiconductor strength with America’s AI development
- Enhancing Taiwan’s energy resilience amid AI expansion
- Strengthening Taiwan–U.S. defense-industrial and economic security cooperation
- Using excess savings to promote balanced regional development
Lai announced that the Presidential Office will establish a “National Economic Strategy Guidance Group,” with Lai serving as convener and coordinating with Premier Cho’s Economic Development Committee. He said the administration will work across agencies to address structural challenges, develop implementation strategies, and unite political parties, businesses, and civil society to elevate Taiwan’s economy “to an entirely new level.”
The agreement will take effect after both sides complete internal procedures. The Executive Yuan plans to submit the ART and the January investment MOU to Taiwan’s legislature for review as soon as possible.
‘Industry outreach will not stop’
Lai stressed that even with positive negotiation results, the government’s engagement with industries will continue. “How to reach every industry, to understand the problems they are currently facing, or how to expand industrial benefits under a new situation, requires cooperation between the government and businesses,” said Lai, adding, “So we will not stop our industry outreach journey just because negotiations have ended. Supporting industry is an ongoing task — a continuous effort by myself, Premier Cho Jung-tai, and all relevant government officials.”
Yahoo News reported that Democratic Progressive Party officials Wu Szu-yao and Wu Cheng held a press conference on Feb. 12 presenting polling data on the tariff agreement. Wu Cheng said 61 percent of respondents were satisfied with the 15 percent non-stacked tariff outcome, while 24.8 percent were dissatisfied. Support was strong across regions, including 65.3 percent satisfaction in Taipei and 66.3 percent in the Kaohsiung–Pingtung area. Among citizens aged 20–29, satisfaction reached 66.6 percent.
On the impact for traditional manufacturing sectors, where tariffs are expected to drop by roughly 10 percent, 70 percent believed exports would benefit, while 20.8 percent said they would not.
Wu Cheng added that the public strongly supports deepening U.S.–Taiwan cooperation, particularly in building “non-red” supply chains in AI and semiconductors, with 71.4 percent in favor. Wu Szu-yao said the poll reflects broad cross-party and cross-generational consensus. Overall, 74.1 percent support Taiwan’s legislature moving quickly to review and approve the agreement, while only 14.9 percent oppose it.
She pointed to strong economic indicators supporting the administration’s trajectory, noting that Taiwan’s 2025 GDP growth reached 7.37 percent, the highest in 15 years, while unemployment fell below 3 percent, the best level in 25 years.
