EXPLAINER / 5 things to know about the Taiwan-U.S. trade deal

Taipei, Feb. 14 (CNA) Ten months after U.S. President Donald Trump sent a seismic wave across the globe with a new tariff policy in April 2025, Taiwan and the United States on Thursday signed an Agreement on Reciprocal Trade (ART) in Washington.

What does the agreement -- described by President Lai Ching-te (賴清德) as "securing significant benefits for Taiwan's industries and our economy as a whole" -- involve? How could it affect Taiwan's goods and markets? When will it take effect? Here are five things to know about the deal:

What is ART about?

The ART framework covers both exports and imports.

Under the agreement, U.S. tariffs on Taiwanese goods will be lowered from the current 20 percent to 15 percent without stacking, putting Taiwan on a par with Japan and the EU.

Taiwan has secured additional exemptions from reciprocal tariffs for 1,811 industrial products exported to the U.S., with the average tariff rate for applicable products expected to fall to 12.32 percent, according to Taiwan's Cabinet.

On the import side, Taiwan will waive tariffs on 18.3 percent of U.S. industrial products that were not previously duty-free.

Partial tariff reductions will also apply to 20 items related to military industry resilience.

How would ART affect Taiwan's automotive market?

Passenger vehicles imported from the U.S. will be exempted from a 17.5 percent base tariff, while light trucks will face lower levies to varying degrees depending on their categories.

Minister of Economic Affairs Kung Ming-hsin (龔明鑫) estimated that the new measures could lower prices of U.S. vehicles by up to 10 percent.

The U.S. currently ranks as Taiwan's third-largest source of vehicle imports, with around 6 percent of market share.

Domestic importers told CNA that the deal is unlikely to significantly affect local manufacturers' mainstream models over the next three years, but imported vehicles could expand their market share in Taiwan from around 50 percent to nearly 60 percent in the long run.

How would ART affect Taiwan's agriculture market?

Under the deal, Taiwan has committed to halving tariffs on 15 U.S. pork products within three years of the agreement taking effect, reducing rates to between 6.3 percent and 10 percent, the Cabinet said.

Taiwan will allow imports of U.S. ground beef as well as beef heart, liver and kidneys.

However, items of public concern -- including skulls, brains, eyes and spinal cords from cattle aged over 30 months -- will remain prohibited, along with mechanically separated beef and other specified organs.

Mandatory country-of-origin labeling for beef and pork products will remain in place for packaged, bulk and restaurant offerings.

On staple crops, the Cabinet said current tariff levels on 27 major agricultural products tied to food security -- including rice, chicken, oysters, clams, garlic and red beans -- will be retained.

Import tariffs on rice and rice products will not be reduced, and existing tariff-rate quotas for rice will remain unchanged.

At the same time, the U.S. will lift all tariffs on 261 Taiwanese agricultural products, paving the way for Taiwanese goods to expand in the U.S. market, according to the Ministry of Agriculture (MOA).

When does ART take effect?

It remains unclear when the ART will take effect.

Vice Premier Cheng Li-chiun (鄭麗君), who led Taiwan's negotiation team, said the U.S. has agreed to allow the tariff reductions to take effect in advance through the publication of a notice in the Federal Register, pending completion of domestic procedures.

On Taiwan's side, the agreement still requires approval in the opposition-controlled Legislature, which is scheduled to open a new session in late February.

This is important because Trump recently raised tariffs on South Korea, citing delays in parliamentary ratification of a similar agreement.

What does Taiwan's opposition say?

The Kuomintang (KMT) said its legislative caucus will establish a supervisory group to ensure public welfare and protect the interests of affected sectors during the mandatory legislative review.

The KMT warned that the agreement could jeopardize food safety, including on school campuses, and undermine labor rights, particularly for workers in the automotive, agricultural, livestock and medical sectors, due to expanded market access for U.S. goods.

Meanwhile, the Taiwan People's Party (TPP) criticized what it called a lack of transparency during negotiations, saying the Cabinet failed to brief the Legislature at any stage.