TPP leader urges new talks on U.S.-Taiwan trade pact, expert disagrees

Taipei, Feb. 25 (CNA) Taiwan People's Party (TPP) chairman Huang Kuo-chang (黃國昌) on Wednesday urged the government to seek talks with Washington on whether to revise the U.S.-Taiwan Reciprocal Trade Agreement (ART), while Chung-Hua Institution for Economic Research (CIER) President Lien Hsien-ming (連賢明) warned against such action.

Lian noted that seeking to renegotiate the pact would be tantamount to tearing it up and could leave Taiwan in a more disadvantageous position.

These remarks came after the Supreme Court of the United States (SCOTUS) ruled that "reciprocal" tariffs imposed by U.S. President Donald Trump under the International Emergency Economic Powers Act (IEEPA) were unconstitutional, prompting the administration to invoke Section 122 of the 1974 U.S. Trade Act to impose a global 15 percent tariff in addition to the most-favored-nation (MFN) tariff rate.

That move has created uncertainty for Taiwan, which had just signed the ART.

Speaking at a news conference, Huang said he has consistently urged people "to go back and look at the text of the agreement."

The ART does not stipulate that the U.S. cannot impose an additional 15 percent tariff under Section 122 of the 1974 U.S. Trade Act, Huang added.

Taiwan should seek an undertaking from the U.S.that it "will not impose an additional 15 percent tariff under the 1974 Trade Act," he said.

Lien, however, said on a YouTube livestream on Tuesday that although SCOTUS declared the IEEPA tariffs unconstitutional, "the section that most deeply affects Taiwan's exports to the U.S. is actually Section 232, especially national security industries including semiconductors."

Taiwan and the U.S. earlier reached agreements on US$250 billion each in enterprise investment and credit guarantees "in exchange for the U.S. side granting Taiwan most-favored-nation treatment under Section 232," he added.

"This means that in the future, no matter which country the U.S signs more favorable conditions with, Taiwan will automatically enjoy them," he said, warning that if Taiwan were to halt or overturn the agreement, it would face two risks:

"First, Taiwan has already committed to large-scale investment in the U.S., and if it breaches the agreement it may invite retaliatory tariffs on specific industries."

"Second, Taiwan had the fourth-largest surplus of any country with the U.S. last year and could easily be listed for investigation under Section 301 of the 1974 U.S. Trade Act, at which point tariffs would lose the 15 percent cap protection."

Lien added that "currently no other country has proposed renegotiation," and if Taiwan were to do so now, "it would be the first country to challenge Trump."