Taiwan Boosts U.S. Trade Amid Crucial Taiwan and US Tariff Negotiations

Intermediate | July 23, 2025

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Understanding the Trade Climate

Tariffs and Negotiations

Taiwan is actively boosting its trade with the United States, amidst ongoing discussions about import taxes, known as tariffs. These Taiwan and US tariff negotiations are a major focus for both governments as they work to resolve economic tensions.

Background on U.S. Tariffs

In April 2025, the U.S. first imposed a 32% tax on most Taiwanese goods. This was later reduced to 10% for a negotiation period, now extended until August 1, 2025.

Taiwan’s Response

Taiwan’s President Lai Ching-te has affirmed Taipei will not retaliate with its own tariffs. Instead, Taiwan plans to increase imports from the U.S. and boost investments there, aiming to reduce the existing trade deficit.

Crucial Discussions

Progress in Negotiations

Trade talks between Taipei and Washington are currently at a “crucial moment.” A third round of in-person negotiations recently concluded with agreements on several key topics, and a fourth round is tentatively scheduled.

Outlook from Leaders

Vice President Hsiao Bi-khim acknowledged “bumps” in the discussions but expressed optimism for a mutually acceptable solution. Taiwan was among the first countries with which the U.S. began tariff talks. Taipei is eager to secure a deal to maintain its economic growth and ensure continued U.S. military support.

Taiwan’s Economic Role and Trade Figures

Key Trading Partner

2024 Trade Overview

In 2024, Taiwan was the United States’ seventh-largest trading partner. Total U.S. goods trade with Taiwan reached an estimated $158.6 billion that year, a significant 24.2% increase from 2023.

Trade Balance

U.S. goods exports to Taiwan increased by 6.0% to $42.3 billion. However, U.S. goods imports from Taiwan surged by 32.5% to $116.3 billion, resulting in a U.S. goods trade deficit of $73.9 billion in 2024—a 54.6% increase over the prior year.

Global Technology Hub

Key Export Categories

Key Taiwanese exports to the U.S. in 2024 included automatic data processing equipment and integrated circuits, items also prominent in U.S. exports and imports with Taiwan.

Taiwan’s Tech Importance

Taiwan’s role in global technology and manufacturing supply chains is vital. It produces over 60% of the world’s chips and 90% of the most advanced ones.

Effects of U.S.-China Tariffs

U.S. tariffs on China since 2018 have also contributed to increased Taiwanese exports to the U.S., as some production has shifted from China to Taiwan.

Vocabulary

tariff (noun): A tax on goods coming into or going out of a country.
- Example: “The new tariff on imported cars made them more expensive.”
negotiation (noun): Formal discussions between people who are trying to reach an agreement.
- Example: “The companies are in negotiation to resolve their dispute.”
imposition (noun): The act of forcing something unwelcome to be accepted.
- Example: “The imposition of the new rules was met with resistance.”
retaliate (verb): To react to an attack or injury with a similar one.
- Example: “They decided not to retaliate after the insult.”
deficit (noun): The amount by which something, especially money, is too small.
- Example: “The company reported a budget deficit this quarter.”
crucial (adjective): Extremely important, because it will affect other things.
- Example: “Making this decision is crucial for our future.”
consensus (noun): A general agreement among a group of people.
- Example: “After a long discussion, they reached a consensus.”
surge (verb): To increase suddenly and powerfully.
- Example: “Online sales surged during the holiday season.”
prominently (adverb): In a way that is easily seen or noticed.
- Example: “The CEO’s name was prominently displayed on the company building.”
affirm (verb): To state something as true, often in a strong or public way.
- Example: “The president affirmed his commitment to the peace talks.”

Discussion Questions (About the Article)

What was the initial tariff imposed on Taiwanese goods, and how did it change?
What is President Lai Ching-te’s strategy to address the trade situation with the U.S.?
Why is Taiwan eager to secure a trade deal with the U.S.?
How much did the U.S. trade deficit with Taiwan increase in 2024?
What significant role does Taiwan play in global technology supply chains?

Discussion Questions (About the Topic)

In your opinion, what are the biggest challenges for countries trying to negotiate trade deals?
How might tariffs affect the everyday lives of people in both the U.S. and Taiwan?
Do you think trade deficits are always a bad thing for a country? Why or why not?
Why is the production of integrated circuits so important in the global economy?
How important do you think international trade agreements are for global stability?

Related Idiom

To clear the air

Meaning: To resolve a disagreement or a problem, often by having an honest discussion.
Example: “After their argument, they decided to meet to clear the air and move forward.”

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This article was inspired by: July 15 2025 – Reuters