Vice Premier Cheng Li-chiun convened a press conference on Monday to address U.S. tariffs and the Taiwanese government's measures to support affected industries. The vice premier stated that Taiwan and the United States have conducted four rounds of in-person negotiations and 10 videoconference discussions to date. She said the current 20% tariff rate is provisional as talks are ongoing. The goal of subsequent negotiations is to secure a more favorable and reasonable rate, and to exempt the new rate from stacking with preexisting tariff rates. Once a final agreement is reached with the U.S., the Executive Yuan will promptly provide a full explanation of the agreement's contents to the public and the Legislative Yuan, along with an impact assessment, and the full text of the agreement will be submitted to the Legislature for deliberation.
The vice premier noted that one reason the negotiations could not be finalized before August 1 was that Taiwan ranked as the sixth-largest source of the U.S. trade deficit, which reached approximately US$73.9 billion in 2024, with 90% of that stemming from the information and communications technology (ICT) sector, including semiconductors, ICT hardware and electronic components. These products are also under the investigation pursuant to Section 232 of the U.S. Trade Expansion Act of 1962, adding complexity to the negotiations. As a result, Taiwan and the U.S. require additional time to continue dialogue on related issues as well as supply chain cooperation.
Vice Premier Cheng said that one of the challenges in the negotiations has been the U.S. side's push for the complete opening of markets. She emphasized that on the issue of non-tariff trade barriers, Taiwan's negotiating team has consistently advanced talks guided by the principles of safeguarding national and industrial interests, protecting public health and ensuring food security.
Regarding the calculation of tariff rates, Vice Premier Cheng said that, after the U.S. announced its tariff policy in April, the Executive Yuan had publicly clarified that, under the relevant U.S. executive orders, tariffs on Taiwanese exports would be calculated by adding the new tariff rate to the existing most-favored-nation (MFN) rates applied to Taiwan. In effect, the overall tariff rates would be the MFN rates plus the current provisional rate of 20%.
The vice premier highlighted that the Executive Yuan has announced a range of support measures to address the tariffs' impact on Taiwanese industries. The initiatives include financial assistance as well as plans to enhance industry competitiveness, develop diverse markets, offer tax incentives and stabilize employment. For sectors that are hit harder by foreign competition, the government will also launch programs to provide targeted support.
Given the longstanding complementary partnership between Taiwan and the U.S. in the high-tech supply chain, not to mention growing Taiwanese investment in the U.S., Vice Premier Cheng noted that the government must examine ways to approach these negotiations holistically, so as to ensure a fair and favorable environment for Taiwanese businesses in the U.S., promote long-term Taiwan-U.S. supply chain cooperation, and strengthen the global positioning of Taiwan's industries.