The United States and Taiwan have reached an agreement on reciprocal trade that would cement a 15% tariff cap on imports from the East Asian country.
Under the agreement, the U.S. will charge no more than a 15% tariff on goods from Taiwan through a combination of most favored nation duties and reciprocal levies. The U.S. also agreed to eliminate reciprocal tariffs on certain agricultural products consistent with exemptions the Trump administration installed in November.
The 15% tariff cap aligns with the rate set in a trade and investment pact the U.S. and Taiwan reached last month. However, it is unclear if this latest deal is separate from that agreement or a modified version of the original. The White House did not immediately respond to a request for clarification.
In the latest pact, Taiwan agreed to enact plans to reduce most tariffs on U.S. goods while providing preferential market access for U.S. industrial and agricultural products, including automobiles and auto parts, per a fact sheet from the Office of the U.S. Trade Representative. Taiwan also committed to purchase nearly $85 billion worth of U.S. products through 2029, including liquefied natural gas and crude oil, civil aircraft and engines, and power and steel-making equipment.
Additionally, Taiwan said it would establish regulatory parameters to facilitate the trade of beef, pork, poultry, bison meat and processing potatoes. The country also agreed to accept U.S. safety standards for motor vehicles, medical devices and pharmaceuticals.
The agreement further establishes terms for increased cooperation between the two countries on investment in the critical mineral and semiconductor sectors. The U.S. also said it would provide preferential treatment to goods from Taiwan with respect to Section 232 levies on semiconductors.
Taiwan also committed to not charge value-added or digital service taxes while strengthening environmental, labor and intellectual property protections. The country also plans to align with the U.S. on export control measures and to address potentially unfair trade practices from companies controlled by third countries within its borders. Further, the two countries will build on existing customs compliance efforts by entering into a new pact aimed at deterring duty evasion.
Both the U.S. and Taiwan must now complete internal procedures to implement the reciprocal trade agreement. The deal will go into force one day after each country notifies the other it has completed processes to implement the terms of the agreement.
The U.S. has secured agreements and framework deals addressing tariffs and other trade matters with several trading partners in recent weeks, including India, Bangladesh and North Macedonia. These pacts build on others the Trump administration has reached over the last year, although many still remain to be finalized, including those with the European Union and South Korea, which have both faced recent turbulence.
