Taiwan to seek tariff stacking relief through further talks with U.S.

Taipei, Aug. 11 (CNA) Taiwan will continue to negotiate with the United States to seek tariff stacking relief and a more reasonable levy, Vice Premier Cheng Li-chiun (鄭麗君) said Monday.

At a news conference, Cheng, who headed a Taiwan delegation that recently conducted several rounds of negotiations with the U.S. for a lower tariff rate, said since Washington unveiled sweeping "reciprocal" tariffs on April 2, including 32 percent imposed on Taiwan, the tariff has been imposed on top of previous existing tariffs.

In other words, despite the lower 20 percent tariff announced on July 31, Cheng said, the levy has been added to pre-existing most favored nation (MFN) duties and industry-specific trade remedy tariffs, effective on Aug. 7.

For example, the previous tariff imposed on Taiwanese faucet makers when they sold products to the U.S. market was 2.6 percent. Starting from Aug, 7, that increased to 22.6 percent, Cheng said,

"So far, only the European Union has secured tariff stacking relief status and Japan is seeking the same," Cheng said. "Taiwan will try its best to persuade the U.S. to not add the existing tariffs to the 20 percent," she added. "The government is eager to secure a better levy as it does not want to let the public and the industrial sector down."

The Taiwan and U.S. negotiating teams conducted two additional rounds of video meetings on Aug. 7 and Aug. 8 on the tariff issues.

The International Trade Administration had held online meetings with more than 3,000 local exporters on the stacking tariff and more meetings are scheduled, Cheng said.

"The public hopes the government will fulfill its responsibility of explaining tariff-related issues so we will set up a special area on its website to allow the public to make inquiries," Cheng added.

In addition to tariff stacking relief, Cheng said Taiwan's negotiating team will try to seek the best position on a tariff planned by the White House on semiconductors.

In April, the U.S. launched an investigation under Section 232 of the Trade Expansion Act of 1962 for a possible tariff on semiconductor imports. U.S. President Donald Trump said last week that the U.S. will place a tariff of about 100 percent on imported semiconductor chips, but "if you're building in the United States of America, there's no charge."

Among Taiwan's chipmakers, Taiwan Semiconductor Manufacturing Co. (TSMC) is likely to secure an exemption due to its massive investments in the U.S. state of Arizona, including the ongoing US$65 billion and a pledged US$100 billion.

Taiwan has the the sixth largest trading surplus with the U.S. with about 90 percent of the that coming from semiconductors and other electronic components involving Section 232 under the Trade Expansion Act, Cheng said.

"Both sides need more time to communicate with each on cooperation in the global supply chain," she added.

Asked whether the previous negotiations covered increasing arms procurement, Cheng said the two sides did not discuss the issue in detail, noting that President Lai Ching-te (賴清德) has openly pledged to boost the country's defense spending to more than 3 percent of gross domestic product (GDP).

The ruling Democratic Progressive Party government's 2025 defense budget proposed a 6.6 percent increase in defense spending to NT$647 billion, or about 2.5 percent of GDP.

In terms of the local job market, Cheng said the government estimates a total of 42,000 workers will be placed on furlough or lose their jobs due to the U.S. tariffs, and has come up with measures to help impacted workers.

Cheng dismissed criticism that the tariff talks with the U.S. have lacked transparency and kept the public in the dark, saying the negotiating team could not disclose any details until the talks are concluded amid fears any disclosure will impact the negotiations.

Once the talks end, the Cabinet will submit the agreement to the Legislative Yuan for review, Cheng said, adding that she is willing to go to the Legislature and explain the situation to lawmakers.