Trade deal with U.S. secures best tariff rates, safeguards local sectors: Cabinet

Taipei, Feb. 13 (CNA) Taiwan has secured highly favorable tariff treatment while protecting key domestic industries under its newly signed reciprocal trade agreement with the United States, the Cabinet said Thursday, at the conclusion of a 10‑month negotiation process on the deal.

The agreement meets nearly all of Taiwan's objectives laid out in the negotiation process, the Cabinet said in a statement, urging the Legislature to swiftly approve both the trade pact and a bilateral investment memorandum of understanding (MOU).

At a press conference held in Washington after the signing ceremony, Vice Premier Cheng Li-chiun (鄭麗君), who led Taiwan's negotiating team, said the U.S.-Taiwan Agreement on Reciprocal Trade was "a milestone" for bilateral cooperation in trade, investment, and technology.

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Citing U.S. Secretary of Commerce Howard Lutnick, Cheng said Taiwan is "a unique partner" of the United States.

According to the Cabinet, the deal ensures that Taiwan will maintain a competitive position among major economies such as Japan, South Korea, and the European Union.

Under the U.S.-Taiwan Agreement on Reciprocal Trade, the tariff rate on Taiwanese imports into the U.S. will be maintained at 15 percent. Semiconductors and related products will receive the most favorable treatment available under Section 232 of the U.S. Trade Expansion Act.

In addition, 2,072 items -- representing nearly 20 percent of Taiwan's total exports to the U.S. -- will be exempt from reciprocal tariffs and will be subject only to the standard Most-Favored-Nation (MFN) rates.

As a result, the average U.S. tariffs on Taiwanese goods will drop to 12.33 percent, significantly lower than the 35.78 percent that was in place when the trade negotiations began in April 2025, and the 23.78 percent recorded in August 2025.

Under the exemptions, 42 percent of Taiwan's agricultural export value and 36 percent of its industrial export value will now avoid reciprocal tariffs, the Cabinet said. Some of the main items are Taiwanese tea, orchids, tapioca flour, and telecommunications equipment, it added.

While the American negotiators sought broader market access, Taiwan succeeded in maintaining its existing tariffs on 27 U.S. agricultural imports, such as rice and chicken, thus reducing the potential impact on local farmers, the Cabinet said.

Meanwhile, Taiwan will cut tariffs by half on 15 U.S. pork products over three years, while U.S. ground beef and offal will also gain access to the Taiwan market. Those decisions were based on scientific assessment and guarantees that food safety controls will remain in place, according to the Cabinet.

The trade agreement also covers industrial goods, removing all tariffs on U.S.-made cars imported to Taiwan but maintaining the current rate on trucks.

Cheng said that while domestic car manufacturers may face increased competition, the Taiwan government has developed plans to bolster the domestic auto industry.

Beyond tariffs, the trade pact commits both sides to enhancing transparency, improving the business environment, and strengthening cooperation on secure and trusted supply chains.

Taiwan has also pledged to expand its semiconductor investments in the U.S. and to help establish a "Taiwan Model" chipmaking infrastructure, characterized by specialization, clustering, and high efficiency.

In return, Taiwan will expect increased American investment in strategic industries, including artificial intelligence and defense technology.

The trade pact, which builds on agreements reached in mid-January, was signed Thursday by Taiwan's representative to the U.S., Alexander Yui (俞大㵢), and Ingrid Larson, managing director of the American Institute in Taiwan's (AIT) Washington Office.

The agreement will now be sent to Taiwan's Legislature for review and approval, which is a crucial part of the process, given that U.S. President Donald Trump recently raised reciprocal tariffs on South Korea after its parliament failed to quickly ratify a similar pact.

Cheng said the American negotiators had proposed making the agreement conditional on legislative approval in Taiwan, but her team had successfully pushed back on that idea.

"We encourage our lawmakers, however, to review and pass the agreement as soon as possible so the new tariff rates can take effect," she said.