Taiwan calls 20% U.S. tariff “temporary,” eyes separate deal for chip exports
Taipei aims to lower Trump-era tariffs and secure sectoral exemptions for semiconductors and tech goods.
Taiwan’s President Lai Ching-te said Friday that the newly imposed 20% U.S. tariff on imports from Taiwan is “temporary”, and Taipei is actively working to negotiate a more favorable rate with Washington, News.Az reports, citing Reuters.
The announcement comes after U.S. President Donald Trump signed an executive order Thursday imposing tariffs between 10% and 41% on imports from multiple countries, with Taiwan hit by a 20% levy — lower than the previously threatened 32%, but still higher than rates secured by Japan (15%), South Korea, and the European Union.
“The 20% tariff rate was never Taiwan’s target to begin with. We will continue negotiations and strive for a more favorable rate,” said Lai at a press briefing.
A U.S. official confirmed that talks are ongoing and described Taiwan’s proposal as “well received,” adding that a final agreement appears to be close.
A key sticking point is tariffs on semiconductors and advanced tech products — sectors critical to Taiwan’s economy and national identity. These goods are under review as part of a U.S. national security investigation under Section 232 of the Trade Expansion Act of 1962, which could result in higher, non-reciprocal tariffs.
Taiwan’s top chipmakers, including TSMC (2330.TW), are closely watching the outcome, with a final U.S. decision expected within two weeks, according to Commerce Secretary Howard Lutnick.
“If the tariff rate is too low, companies will continue manufacturing abroad and simply absorb the costs,” said Yusuf Huang of Neuberger Berman, noting that Trump’s reshoring goal could push final chip tariffs even higher.
Analysts say the 20% rate would apply to only about 25% of Taiwan’s exports to the U.S., mostly affecting machinery, plastics, and lower-end manufacturing — according to a leaked report from Taiwan’s Ministry of Economic Affairs.
Much of Taiwan’s high-end tech manufacturing is now located in Southeast Asia and Mexico, meaning those goods could fall under different tariff categories.
Yuanta Securities described the current tariffs as just the “first battle” in a larger trade standoff between Washington and Taipei, with more clarity expected once the chip-specific Section 232 probe concludes.
Taiwan recorded a $74 billion trade surplus with the U.S. in 2024 — the sixth-largest among U.S. trading partners.
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