Premier seeks to keep MOU, 232 treatment intact amid U.S. tariff shift

Taipei, Feb. 23 (CNA) Taiwan is hoping to safeguard the most favorable terms of a trade deal it recently signed with the United States amid changes in U.S. tariff policy, Premier Cho Jung-tai (卓榮泰) said Monday.

That was the conclusion of a seven-hour meeting on Feb. 21 held to assess the impact of a U.S. Supreme Court ruling on Feb. 20 that invalidated tariffs imposed under the International Emergency Economic Powers Act (IEEPA), Cho said.

Specifically, Cho cited the Taiwan-U.S. investment memorandum of understanding (MOU) and most-favored treatment for high-tech goods under Section 232 of the U.S. Trade Expansion Act -- both part of the overall bilateral agreement -- as terms Taiwan wanted to protect.

"This foundation must be safeguarded, and we must immediately confirm this with the U.S.," Cho said, adding that Taipei is in touch with Washington to clarify legal procedures and possible follow-up actions.

The U.S. imposed a 20 percent import duty on goods from Taiwan on July 31, 2025 as part of U.S. President Donald Trump's widespread "reciprocal" tariffs levied using IEEPA authority.

Trade negotiations ensued, and Taiwan eventually got the U.S. to bring the tariff down to 15 percent, the same level as imposed on Japan and South Korea, and provide most-favored treatment for high-tech goods under Section 232, which can penalize specific categories of imported goods for national security reasons.

In exchange, Taiwan committed to direct investment of US$250 billion in the U.S. by Taiwanese companies and the reduction or elimination of tariff and non-tariff barriers to U.S. products.

Even with the Supreme Court decision pending, Taiwan and the U.S. signed the trade deal on Feb. 12 (U.S. time), but it has not yet been ratified by Taiwan's legislative body, the Legislative Yuan.

● Taiwan signs trade deal with U.S. to cut tariffs, open markets (update)

On Feb. 20, the Supreme Court ruled that the IEEPA does not authorize the president to impose tariffs, but Trump then invoked Section 122 of the Trade Act of 1974 to impose a 15 percent global tariff while signaling possible use of Sections 301 and 232.

● Impact of Trump's 10% tariff on Taiwan 'limited': Executive Yuan

Roy Chun Lee (李淳), associate research fellow at Taiwan's Chung-Hua Institution for Economic Research and the country's former representative to the European Union, said the ruling has heightened uncertainty in U.S. trade policy.

Trump's broader goals, cutting trade deficits and attracting investment, remain unchanged, Lee said, meaning Washington could turn to other legal tools if one path is blocked.

"If Law A does not work, it will switch to Laws B, C, D or E," he said.

Lee noted that Sections 122, 301 and 232 all carry limits, including time caps, investigative requirements and narrower scopes, potentially resulting in overlapping or sequential tariffs and greater uncertainty.

He said the Taiwan-U.S. agreement signed on Feb. 12 before the court ruling gave Taiwan an edge, calling it "a fast-track entry card without having to queue" as more countries seek talks with Washington.

The Section 232 component in the deal is not directly affected by the ruling and should be fully defended, Lee said, while the reciprocal tariff arrangement faces greater uncertainty after the earlier duties were struck down.

Executive Yuan spokesperson Michelle Lee (李慧芝) said Sunday that the government will continue to monitor the Trump administration's corresponding measures and carefully assess follow-up responses, including "whether the reciprocal trade agreement will be submitted to the Legislature for review."

The opposition-controlled Legislature must approve the trade deal for it to be carried out, but opposition lawmakers have suggested it be renegotiated after the tariff at the heart of the agreement was found to be unconstitutional by the U.S. Supreme Court.