Beyond Tariffs: AmCham Says Double Taxation Pact Is Key to Unlocking Investment in Taiwan

As U.S. President Donald Trump warned of raising tariffs on South Korea from 15% to 25% after Seoul failed to pass a bilateral tariff agreement, concerns have surfaced over whether Taiwan could face similar pressure.

Addressing the issue on Tuesday, Anita Chen, Chairperson of the American Chamber of Commerce in Taiwan (AmCham Taiwan), said the U.S.–Taiwan tariff arrangement is moving in the right direction and stressed that Taiwan is unlikely to follow the same path as South Korea. AmCham, she added, does not wish to see such a scenario unfold in Taiwan.

Chen emphasized that U.S.–Taiwan cooperation should extend beyond the semiconductor sector to encompass broader economic ties. Progress on a double taxation agreement (DTA), she said, would be crucial to unlocking additional investment momentum and encouraging multinational firms to deepen their long-term commitments in Taiwan.

AmCham Taiwan on the same day, released its2026 Business Climate Survey, which shows that international firms continue to view Taiwan as a key global hub for technology and investment, supported by resilient economic and industrial fundamentals.

While Taiwan is often perceived externally as a potential geopolitical flashpoint, most surveyed companies reported heightened risk awareness alongside strengthened business continuity planning and risk management. Rather than pulling back, many firms have chosen to maintain or expand their presence in Taiwan, gradually transforming uncertainty into what AmCham describes as a long-term “resilience dividend.”

According to the survey, 82% of respondents expressed confidence in Taiwan’s economic growth over the next 12 months, while 84% were optimistic about the outlook over the next three years.

Notably, 92% of surveyed companies said they plan to maintain or increase investment in Taiwan in 2026, underscoring strong long-term commitment. Confidence is particularly pronounced in the ICT sector, where around 70% of firms intend to further expand operations.

Companies identified talent development and employee training as their top investment priorities, followed by marketing and business expansion. About 56% of respondents invested in research and development in 2025, and 87% consider Taiwan an important target market, highlighting the island’s evolving role as both an innovation hub and a growth market.

AI-related investment stood out as a major trend in the survey. The share of companies investing in AI and IoT rose from around 12% in 2024 to 28% in 2025, and is expected to reach 32% in 2026.

AmCham said the trend reflects Taiwan’s gradual shift from a “global manufacturing center” toward a “technology and innovation frontier,” as firms increasingly turn to AI and digital transformation to enhance efficiency and competitiveness.

On geopolitical and national security risks, respondents ranked “national security” and “cross-strait relations” as the most significant potential threats to operations. However, only about 7% of companies reported experiencing major operational disruptions in 2025 due to cross-strait tensions, revealing a clear gap between perceived risk and actual impact.

The proportion of firms viewing geopolitical risk as a “major investment barrier” has declined sharply, from 66% in 2023 to 38% in the latest survey, suggesting growing maturity in corporate risk management and global strategies.

While energy remains a medium- to long-term concern, overall anxiety has eased compared with the previous year. Companies, AmCham noted, are primarily focused on energy reliability, resilience, and a clear transition pathway, adding that clearer government guidance would further encourage investment.

On talent and living conditions, expatriate professionals generally praised Taiwan for personal safety, healthcare quality, and its welcoming environment for foreigners, while concerns persist over wages, road safety, banking services, and childcare availability.

AmCham views the January U.S.–Taiwan tariff arrangement, which set a 15% cap on certain products, as a constructive step that enhances predictability for businesses and aligns Taiwan’s treatment more closely with major U.S. partners.

Regarding the long-discussed double taxation agreement, AmCham said recent interactions in Washington suggest that this year is widely seen as one with realistic potential for progress. Remaining challenges relate more to U.S. congressional scheduling than to a lack of political will. Resolving the issue would significantly facilitate two-way investment and the cross-border flow of capital and talent.
（Related： Beyond TSMC: Where Taiwan’s Next “Silicon Shield” Is Taking Shape ｜ Latest ）