Taiwan Pushes for Lower U.S. Tariffs

Intermediate | August 8, 2025

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Taiwan US Tariffs – The Tariff Situation

Recent Developments

Taiwan currently negotiates with the United States to reduce newly implemented tariffs, highlighting the broader issue of Taiwan US Tariffs. Effective August 7, 2025, the U.S. imposed a “temporary” 20% tariff on Taiwanese exports. This rate followed an initial proposal in April 2025 for a higher 32% duty. Taiwan views the 20% rate as a “stage achievement,” acknowledging progress but pushing for further reductions. Furthermore, Taiwan highlights that Japan, South Korea, and the European Union secured a lower 15% tariff. The U.S. trade deficit with Taiwan, which reached US\$73.9 billion in 2024, ranking Taiwan as the sixth-largest contributor, heavily influenced the tariff imposition.

Taiwan’s Key Exports

Taiwan’s export composition heavily features information and communications technology (ICT). Approximately 60% of Taiwan’s exports to the U.S. consist of ICT, including vital semiconductor chips. Taiwan is a global manufacturing powerhouse for these crucial components. In 2024 alone, Taiwan exported US\$111.4 billion in goods to the U.S., with electronics and ICT accounting for over US\$79 billion.

Taiwan’s Efforts and Impact

Negotiating for Better Terms

Taiwan’s negotiating team, led by Vice Premier Cheng Li-chiun, actively holds discussions with U.S. counterparts. They emphasize Taiwan’s national interests, industrial needs, food security, and public health. President Lai Ching-te stated on August 1, 2025, that the 20% tariff was “never Taiwan’s goal.” He expressed confidence in achieving further reductions. To avoid these punitive tariffs, Taipei has pledged increased investment in the U.S., greater American energy purchases, and boosted defense spending. For example, Taiwan Semiconductor Manufacturing Co. (TSMC), a critical chipmaker, committed an additional US\$100 billion to expand its U.S. manufacturing operations. Reports suggest that to reach a 15% tariff, the U.S. demanded TSMC acquire a 49% stake in Intel and invest another US\$400 billion in the U.S.

Industry Challenges and Support

The 20% tariff will unevenly affect Taiwanese industries. Sectors like orchids, plastics, and machine tools face heightened competition. Orchid exports, for instance, are vulnerable as Taiwan holds a significant 46% market share in the U.S., while Dutch competitors face a lower 15% tariff. Therefore, the Executive Yuan plans to draft a resilience special budget, increasing it from NT\$88 billion to NT\$93 billion (US\$2.9 billion), to assist small and medium-sized enterprises (SMEs) in responding. Politically, the tariff imposition creates a challenge for the Lai administration, facing domestic scrutiny and potential recall votes.

Vocabulary

Tariff (noun): A tax on imported goods.
- Example: “The government imposed a new tariff on imported cars.”
Negotiate (verb): To discuss formally to reach an agreement.
- Example: “The two countries will negotiate a new trade deal next month.”
Deficit (noun): The amount by which expenses exceed income or imports exceed exports.
- Example: “The trade deficit grew significantly last year.”
Concessions (noun): Things given up or agreed to in order to reach an agreement.
- Example: “Both sides made concessions to finalize the contract.”
Punitive (adjective): Intended as punishment.
- Example: “The company faced punitive measures for violating the rules.”
Crucial (adjective): Extremely important or necessary.
- Example: “Getting enough sleep is crucial for your health.”
Powerhouse (noun): A country, organization, or person with a lot of power or influence.
- Example: “Germany is an economic powerhouse in Europe.”
Exempt (adjective): Free from an obligation or liability imposed on others.
- Example: “Students are exempt from paying the parking fee.”
Relocation (noun): The act of moving to a new place and establishing one’s home or business there.
- Example: “The company announced the relocation of its headquarters.”
Scrutiny (noun): Critical observation or examination.
- Example: “The politician’s actions came under intense public scrutiny.”

Discussion Questions (About the Article)

What was the U.S.’s initial proposed tariff rate on Taiwanese goods, and what is the current temporary rate?
Which major Taiwanese industry makes up a large portion of its exports to the U.S.?
What are some concessions Taiwan has offered to avoid higher tariffs?
How might the 20% tariff affect different Taiwanese industries unevenly?
Why is the tariff imposition a political challenge for the Lai administration?

Discussion Questions (About the Topic)

Do you think tariffs are an effective way to address trade imbalances between countries? Why or why not?
How might global supply chains be affected if more countries push for domestic manufacturing over imports?
What role do you think international negotiations play in resolving trade disputes?
Consider the impact on consumers. How might tariffs affect the prices of goods they buy?
If you were a leader in Taiwan, what other strategies might you use to respond to these U.S. tariffs?

Related Idiom

Bite the bullet

Meaning: To endure a difficult or unpleasant situation without complaining.
Example: “Taiwan’s smaller industries might have to bite the bullet and adapt to the new tariff rates.”

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This article was inspired by: The Epoch Times, July 31, 2025