Taiwan Trade Agreement Includes Tariff Cuts

The U.S. has announced the conclusion of an agreement on reciprocal trade with Taiwan that, when it takes effect, will include the following terms.

Tariffs. The U.S. will reduce its tariffs on originating goods from Taiwan, applying the higher of the most-favored-nation duty rate or 15 percent (comprising the MFN duty and a “reciprocal” tariff). The U.S. has also identified certain products from the goods contained in the “Potential Tariff Adjustments for Aligned Partners” annex to executive order 14346 that will not be subject to a reciprocal tariff.

Further, the U.S. will provide Taiwan preferential treatment with regard to tariffs and other remedial measures in the Section 232 investigation of semiconductors and semiconductor manufacturing equipment, taking into account Taiwan’s economic and national security alignment and high-tech strategic partnership with the U.S., as well as in certain other Section 232 investigations.

Taiwan will eliminate or reduce 99 percent of its tariff barriers and provide preferential market access for U.S. industrial exports, including autos and auto parts, chemicals, seafood, machinery, health products, electrical products, metals, and minerals; as well as U.S. agricultural exports, including horticultural products, wheat, beef and beef products, dairy products, pork and pork products, lamb and sheep meat, tree nuts, dog and cat food, ketchup, and peanuts.

Non-tariff barriers. Taiwan has committed to (1) remove quantitative restrictions and accept U.S. vehicles built to U.S. federal motor vehicle safety standards and emissions standards without additional requirements for entry, (2) accept Food and Drug Administration marketing authorizations for medical devices and pharmaceuticals manufactured in the U.S. without additional requirements for entry, and (3) ensure transparency and fairness regarding reimbursement and listing of medical devices and pharmaceuticals under its health care system.

Other. Taiwan will also (1) prioritize enforcement against intellectual property theft, (2) prohibit the importation of goods produced with forced labor, (3) address illegal logging, fishing, fisheries subsidies, and wildlife trade, (4) take similar approaches as the U.S. to good regulatory practices, customs and trade facilitation, standards and technical regulations, and services and digital trade, and (5) finalize commitments on combatting duty evasion.