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The United States has inked a trade deal with Taiwan that will significantly lower tariffs on American goods.
Some shit you should know before you dig in: If you’re unaware, trade between the United States and Taiwan is substantial, hitting about $185.7 billion in 2024. Prior to the new deal, most Taiwanese exports entering the US were subject to a 20% general tariff rate. Taiwan’s largest exports to the US include semiconductors, integrated circuits, electronics, and high-tech components, while its biggest imports from the US include energy products, aerospace equipment, machinery, vehicles, and agricultural goods.
What’s going on now: In a notable development, US Trade Representative Jamieson Greer and Taiwanese officials formally signed a reciprocal trade agreement that lowers the general US tariff on Taiwanese goods from 20% to 15%, bringing it in line with rates applied to regional partners like Japan and South Korea. In return, Taiwan agreed to eliminate or reduce 99% of its tariff barriers on US goods and grant preferential market access across a wide range of industrial and agricultural products.
Under the deal, Taiwan will significantly increase purchases of American goods over the coming years, including tens of billions of dollars in liquefied natural gas, crude oil, aircraft, and heavy machinery. It will also ease long-standing non-tariff barriers, including accepting certain US vehicle standards and expanding access for American beef, pork, dairy, machinery, chemicals, and manufactured products. In return, the US will exempt a range of Taiwanese goods from tariffs, including select agricultural products, natural resources unavailable domestically, generic pharmaceuticals, aerospace components, and certain electronics.
Taiwanese President William Lai Ching-te has called the agreement a “pivotal” moment that will make thousands of Taiwanese products more competitive in the American market. Greer said the pact would eliminate tariff and non-tariff barriers facing US exporters and significantly enhance supply chain resilience, especially in advanced technology industries. US Commerce Secretary Howard Lutnick framed the deal as part of a broader push to expand domestic manufacturing and secure semiconductor supply chains.
This all comes as China has intensified criticism of closer US-Taiwan economic ties, arguing that such agreements risk undermining China’s sovereignty claims and weakening Taiwan’s domestic industries. As of now, China has not commented on the new trade deal between the US and Taiwan.
