Taiwan manufacturers upbeat after U.S. lowers tariffs

Taipei, Jan. 16 (CNA) Taiwan's machinery, automotive parts and electrical manufacturers have voiced general optimism after the announcement Friday of a new Taiwan-United States trade deal that lowers tariffs on Taiwanese goods.

● Taiwan commits to investing US$250 billion in U.S. chip sector

● U.S. lowers tariff on Taiwanese goods to 15% in trade deal (update)

Under the agreement, the United States have agreed to reduce tariffs on Taiwanese products from 20 percent to 15 percent without stacking them on existing most-favored-nation rates, Taiwan's Executive Yuan said.

Duties applied to Taiwanese auto parts under Section 232 of the U.S. Trade Expansion Act will also be capped at 15 percent, according to a U.S. Department of Commerce news release.

Automotive parts manufacturers said the revised rates will make Taiwanese exports more competitive by bringing them in line with those of major rivals such as Japan, South Korea and the European Union.

Auto parts manufacturer Tong Yang Industry Co. and drivetrain parts maker Hota Industrial Mfg. Co. told CNA the U.S. market accounts for about 50 percent and 60 percent of their revenues, respectively, making the tariff reduction particularly beneficial.

Tong Yang Industry noted that since May 2025, most Taiwanese auto parts exports had been subject to a total tariff of 27.5 percent, consisting of a 25 percent Section 232 surcharge imposed on top of the existing 2.5 percent duty, compared with the 15 percent rate applied to competitors from Japan, South Korea and the EU.

The electrical device manufacturing sector expressed similar optimism, with industry leader Teco Electric & Machinery Co. saying the policy will support its exports of motors and related components to the United States.

Teco added that its Teco-Westinghouse Motor Co. operations in the U.S. will also benefit from lower production costs, as some products rely on components manufactured in Taiwan.

Meanwhile, leaders in Taiwan's machine tool sector offered a more cautious assessment, saying the tariff cuts would help level the playing field but warning that exchange rate movements remain the most critical factor affecting export competitiveness.

The Taiwan Association of Machinery Industry has previously said that the strength of the Taiwan dollar against currencies such as the Japanese yen and South Korean won continues to weigh on the sector's export performance.

Industry representatives also pointed to intensified competition from low-priced Chinese exports as an additional challenge for Taiwan's machine tool manufacturers.

Yen Jui-hsiung (嚴瑞雄), chairman of Tongtai Machine & Tool Co., said that as tariff conditions become more aligned, competition will increasingly depend on technology, manufacturing capability and service value.