Taiwan and the US reached consensus on tariffs

After several months of negotiation, Taiwan and the US have reached a broad consensus on a trade deal.  A memorandum of understanding was signed with US Secretary of Commerce Howard Lutnick and Tawan’s chief negotiator, Vice Premier Cheng Li-chiun

The US has agreed to lower tariffs on Taiwanese goods from 20 percent to 15 percent, without stacking them on existing most-favored-nation (MFN) rates, the Executive Yuan said.   Taiwan has also become the first country to secure the most-favorable treatment for its semiconductor and related product suppliers under Section 232 of the US Trade Expansion Act.  In addition, the trade negotiations included commitments from Taiwan to expand supply chain investment cooperation and deepen Taiwan-US collaboration on artificial intelligence (AI), the Executive Yuan said.  The Taiwan government has also agreed to provide financial institutions up to US$250 billion in credit guarantees to support semiconductor, and information and communications technology investments.  Taiwan is the first country to secure the most-favorable treatment for its semiconductor and related product suppliers, which should significantly ease uncertainties in the local semiconductor industry.  Washington has recognized and accepted a “Taiwan model,” which allows Taiwanese companies to follow their own plans for investing in the US and moving closer to US clients, the Cabinet said, adding that it should encourage local companies to enter the US’ supply chain and build industrial capacity there.  The US Department of Commerce described the arrangement as “a historic trade deal that will drive a massive reshoring of America’s semiconductor sector” and “strengthen US economic resilience, create high-paying jobs and bolster national security.”

A more formal trade pact would be signed in the coming weeks, said Vice Premier Cheng Li-chiun.