Taiwan's Tariff Agreement with the U.S.: $5 Billion Investment for 15% Tariffs, Matching Japan, South Korea, and the EU
The sixth round of in-person tariff negotiations between Taiwan and the U.S. ended on the 15th. The Taiwan administration stated that Taiwan will reduce its tariffs to 15% on an equal basis and not add MFN. It will also enter the U.S. supply chain using the "Taiwan model" and commit to investing $50 billion in the U.S. to build world-class industrial parks.
The sixth round of in-person tariff negotiations between Taiwan and the U.S. concluded on the 15th with a summary meeting. The Taiwan administration issued a press release stating that both sides reached several predetermined negotiation goals, including "Taiwan's equivalent tariff reduction to 15% without adding MFN, 232 tariffs such as semiconductors and semiconductor derivatives obtaining the most favorable treatment, expanding supply chain investment cooperation, and deepening the U.S.-Taiwan AI strategic partnership."
Among these, the most notable is the use of the "Taiwan model" to lead companies into the U.S. supply chain and create industrial clusters. Taiwanese semiconductor and technology giants will launch an unprecedented investment plan totaling $50 billion, including $25 billion in direct investment and $25 billion in credit guarantees. Both the U.S. and Taiwan plan to establish a "world-class industrial park" in the U.S., aiming to make the U.S. the center of global next-generation technology and advanced manufacturing.
On the 15th, U.S. Commerce Secretary Rutenberg said during an interview that under President Trump, the goal was to transfer 40% of Taiwan's entire semiconductor supply chain capacity to the U.S. If Taiwanese companies do not set up factories in the U.S., they may face punitive tariffs as high as 100%. However, if Taiwanese factories commit to investing in the U.S., they can import semiconductor products duty-free during the construction period. Rutenberg emphasized that the credit guarantee mechanism will prioritize assisting small and medium-sized Taiwanese enterprises willing to set up factories in the U.S.
According to a report by CNA, Taiwan's Economic Affairs Minister Chang Chien-yi believes the results of this negotiation are very positive, benefiting not only the high-tech industry but also being a major boon for traditional industries. He also emphasized that the tariff negotiation results combined with the establishment of a two-way investment mechanism are almost equivalent to a free trade agreement, which has significant indicators, showing that the U.S. views Taiwan as a core strategic partner.
The latest tariff agreement makes Taiwan the most favored trading partner among the U.S.'s major deficit economies (the sixth largest deficit economy), matching Japan, South Korea, and the EU. At the same time, Taiwan has become the first country in the world to secure the most favorable tariff treatment for semiconductor and semiconductor-derived products for U.S.-investing companies, and has obtained the most favorable tariff treatment for 232 items, including automotive parts and wood.
Source: rfi
Original: toutiao.com/article/1854476569091100/
Statement: This article represents the personal views of the author.