The United States and Taiwan signed a so-called "reciprocal trade agreement" on February 12, Eastern Time.

Picture 1 from left to right: U.S. Secretary of Commerce Michael R. Pompeo, U.S. Trade Representative Katherine Tai, Executive Director of the American Institute in Taiwan (AIT) in Washington, Lan Ying, head of the Taiwanese representative office in the U.S., Yu Dama, Deputy Head of the Executive Yuan, Zheng Lijun, and Senior Advisor of the Executive Yuan, Yang Zhenyi.

The main contents of the "reciprocal trade agreement" are as follows:

1. Tariff Adjustments (U.S. exports to Taiwan)

The tariff on goods exported from Taiwan to the U.S. was reduced from the original 20% (or higher) to 15% (or the most-favored-nation rate, whichever is higher, and not cumulative).

2,072 items of goods exported from Taiwan to the U.S. have been granted reciprocal tariff exemptions, further reducing the average tariff to about 12.33%.

The U.S. retains the possibility of imposing additional tariffs on certain products (such as semiconductors) under Section 232 in the future, but Taiwan has received strategic preferences.

2. Opening up of U.S. goods to Taiwan (Taiwan cancels or reduces tariffs)

Taiwan has committed to canceling or significantly reducing 99% of tariff and non-tariff barriers.

U.S. products (including automobiles and parts, chemicals, seafood, machinery, medical equipment, pharmaceuticals, etc.) have obtained preferential market access.

Agricultural sector: Opening up imports of U.S. beef, pork, dairy products, corn, wheat, etc., with some products' tariffs reduced from high rates (e.g., pork at 40%, ham at 32%) to 10% or lower; starting from the third year, the tariff on U.S. pork will be reduced to 6.3%-10%; abolishing car import quotas (e.g., a limit of 75 vehicles per model per year), zero tariff for small passenger cars (some tariffs remain for small trucks).

Taiwan accepts U.S. automotive safety standards, medical equipment, and drug standards, simplifying the entry of U.S. companies into the Taiwanese market.

3. Expansion of purchases and investments by Taiwan to the U.S.

Between 2025 and 2029, Taiwan has committed to significantly increasing its purchases from the U.S.:

Liquefied natural gas (LNG) and crude oil: approximately $44.4 billion.

Civilian aircraft and engines: approximately $15.2 billion.

Power equipment, grids, generators, ships, steel manufacturing equipment, etc.: approximately $25.2 billion.

Combined with the investment memorandum signed in January, Taiwanese companies (led by TSMC) will invest at least $250 billion in the U.S. in areas such as semiconductors, AI, and energy. The Taiwanese authorities will also provide up to $250 billion in credit guarantees to support supply chain "returning" to the U.S.

[Witty] Comment: Li Hongzhang dared not sign, but Lai Ching-te dares to sign!

Original article: toutiao.com/article/1856982593218823/

Statement: The article represents the views of the author.