US President Trump signed an executive order on the 31st, announcing the latest round of reciprocal tariffs. Taiwan's tariff was reduced from 32% to a tentative 20%. Taiwan emphasized that this rate is not yet final.
According to the tariff list of Asian countries released by the United States, Taiwan's tax rate is 20%, the same as Vietnam; Japan and South Korea are 15%; Thailand is 19%; the Philippines is 19%; and Myanmar is as high as 40%.
Tariff negotiations between the United States and China are ongoing. A tariff truce, which began in May, is set to expire on August 12th. China has announced a 90-day extension, but the United States has stated that a decision is pending with President Trump. Currently, the US's effective tariff on China is 55%, while China's tariff on the US is 10%.
Taiwan’s President Lai Ching-te said on the morning of the 1st that technical consultations with the United States have been completed, but because the final summary meeting has not yet been held, the 20% tariff is a temporary tariff.
Lai Ching-te stated that while negotiations have achieved initial success, reducing the tariff from 32% to 20%, a 20% rate was not Taiwan's initial negotiation goal. He expressed the hope of securing a more favorable and reasonable rate in subsequent negotiations. The US government has also expressed its willingness to negotiate with Taiwan. Technical consultations have been completed, but the final summary meeting has not yet taken place, so the final tariff rate has not yet been determined.
Reuters reported that a U.S. official said President Lai's statement that negotiations were still ongoing was "accurate."
“This temporary tariff is lower than the original rate and much lower than that of several other major trading partners in ongoing negotiations,” said the official, who declined to be named due to the sensitivity of the matter. “We can interpret this as a sign that Taiwan’s proposal has received a good response and that a final agreement is close.”
Cathay United Bank Chief Economist Lin Chi-chiu told Reuters that among the top ten countries with which the US currently has a trade deficit, the EU, Japan, and South Korea all have a 15% deficit. However, their corresponding increases, including market openness and significant investment in the US, range from $350 billion to $600 billion. Taiwan has yet to see this. If the final figure reaches 20%, similar to Vietnam, which has fully opened its domestic market to zero tariffs, he believes it is "barely acceptable."
Lin Qichao said that the scope of the impact on Taiwan is currently limited to the traditional industry. In the future, it will depend on how the tax rates related to semiconductors, that is, Section 232 and ICT products will be levied.
