On Thursday, February 12, officials from the Trump administration and Taiwan signed a final reciprocal trade agreement, confirming a 15% tariff on imports from Taiwan to the United States, while Taiwan promised to gradually eliminate or reduce tariffs on American goods according to a set schedule.
The Office of the United States Trade Representative announced on Thursday that U.S. Trade Representative Jamieson Greer attended the signing ceremony of the “U.S.-Taiwan Reciprocal Trade Agreement” jointly hosted by the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States. Vice Premier of the Executive Yuan Shen Li-jun and Political Deputy Minister of the Executive Yuan Yang Jenny also attended the signing ceremony.
U.S. Secretary of Commerce Howard Lutnick was also present at the signing ceremony.
Building on the trade agreement reached in January, this agreement added technical terms and specific details, reducing tariffs on Taiwanese goods, including the semiconductor industry, from the initially imposed 20% to 15%, putting Taiwan on par with its main export competitors in Asia, South Korea and Japan.
Greer stated in the announcement, “President Trump’s leadership in the Asia-Pacific region continues to establish prosperous trade relationships with key partners in Asia for the United States, while further promoting the economic and national security interests of the American people.”
“The ‘U.S.-Taiwan Reciprocal Trade Agreement’ will eliminate tariff and non-tariff barriers faced by American exports to Taiwan, creating more opportunities for American farmers, ranchers, fishermen, workers, small businesses, and manufacturers. The agreement also strengthens our long-standing economic and trade relations with Taiwan and significantly enhances the resilience of our supply chains, especially in the high-tech sector,” he said.
The final agreement between the U.S. and Taiwan stipulates that Taiwan will significantly increase its purchases of American products during the period from 2025 to 2029, including $44.4 billion worth of liquefied natural gas and crude oil, $15.2 billion worth of civilian aircraft and engines, $25.2 billion worth of electrical grid equipment and generators, as well as ships and steel manufacturing equipment.
The agreement will immediately eliminate the highest tariff of 26% imposed by Taiwan on many agricultural products, including beef, dairy products, corn, and other imported goods.
The U.S. announcement also revealed that Taiwan has committed to resolving long-standing non-tariff barriers affecting American exports of automobiles, medical devices, and pharmaceuticals. Regarding American automobiles, Taiwan will remove quantity restrictions and accept U.S. cars that comply with U.S. Federal Motor Vehicle Safety Standards and emission standards, without any additional conditions.
In a press release, the Executive Yuan of Taiwan stated that a total of 2,072 products to be exported to the U.S. (with 974 proven products) will be exempt from U.S. reciprocal tariffs and will only be subject to Most Favored Nation (MFN) tariff rates, accounting for 20% of the total number of products subject to U.S. reciprocal tariffs (10,264 items). In other words, one-fifth of the products that would have been subject to reciprocal tariffs will no longer face additional tariffs. In terms of export value, products exempt from reciprocal tariffs are expected to reach approximately $9.9 billion in exports to the U.S. by 2024, accounting for 36% of Taiwanese products subject to reciprocal tariffs.
In response to concerns from various sectors in Taiwan about whether American cars will be tariffed at zero, a press release from the Executive Yuan of Taiwan stated that tariffs on small cars of public concern will be reduced to zero, but certain tariffs on medium and small trucks will be maintained to ensure military resilience. The press release did not specify the tax rates for imported American-made small trucks. The Executive Yuan mentioned that American standard vehicles compliant with Federal Motor Vehicle Safety Standards (FMVSS) will have quantity restrictions lifted, but Taiwan will still ensure the compliance of American standard vehicles imported to protect consumer rights.