Taiwan and the United States have formally signed the Taiwan-US Agreement on Reciprocal Trade (ART), establishing a 15% reciprocal tariff rate on Taiwanese exports to the United States that will not be stacked on top of existing Most Favored Nation (MFN) duties, according to a statement released by Taiwan's Executive Yuan.
The deal was concluded in Washington on Feb. 12 (Eastern Time). Taiwan's delegation was led by Vice Premier Cheng Li-chiun (鄭麗君) and Chief Trade Negotiator Yang Jen-ni (楊珍妮). US Trade Representative Jamieson Greer led the US delegation.
The agreement covers tariffs, non-tariff barriers, digital trade, economic security, and commercial cooperation. The Executive Yuan said the pact will be submitted to Taiwan's legislature for approval in accordance with the Treaty-Making Act.
Tariff Burden Falls Sharply
Before negotiations began, Taiwanese exports subject to reciprocal tariffs faced rates of “32% + MFN,” with an average tariff burden of 35.78%, the Executive Yuan said.
Following two phases of negotiations, the rate has been reduced to 15% without MFN stacking, aligning Taiwan's treatment with Japan, South Korea and the European Union, according to the government statement.
Cheng said at a briefing in Washington that the average tariff rate on Taiwanese exports to the US will fall to approximately 12.33%, compared with 35.8% when the reciprocal tariffs first took effect last April (Executive Yuan briefing; Bloomberg).
The proportion of Taiwan's exports to the US subject to reciprocal tariffs will decline to 15.5% from 24%, Cheng said. The remaining exports — currently under US Section 232 investigations — will be eligible for most-favored tariff treatment going forward, according to the Executive Yuan.
In 2024, Taiwan exported US$113.76 billion in goods to the United States, its largest export market, accounting for roughly 30% of total outbound shipments.
2,072 Product Exemptions
Taiwan secured exemptions for 2,072 product categories, representing 20% of the items previously subject to reciprocal tariffs, according to the Executive Yuan. In value terms, those products accounted for approximately US$9.9 billion in 2024, or 36% of exports previously subject to reciprocal duties.
Among the exempted items:
* 261 agricultural products, accounting for 42% of Taiwan's agricultural export value to the US
* 1,811 industrial products, representing 36% of industrial exports previously subject to reciprocal tariffs
Benefiting sectors include machinery, hand tools, bicycles, plastics, textiles and medical devices, as well as agricultural exports such as edamame, tilapia, and milkfish.
Market Access and US Procurement Commitments
According to Bloomberg, the agreement is designed not only to cut tariffs but also to expand market access for American goods in Taiwan and channel billions of dollars into US energy and technology sectors.
Under the terms unveiled in Washington, Taiwan pledged to purchase more than US$44 billion in liquefied natural gas and crude oil, commit roughly US$25 billion to power-generation equipment, and buy around US$15 billion in US civil aircraft and parts by 2029.
Bloomberg reported that Taiwan will open its market further to American goods, including meat products, dairy, wheat, medical products and automobiles (Bloomberg).
US Trade Representative Greer said in a statement that the agreement would eliminate tariff and non-tariff barriers facing US exports and enhance supply chain resilience, particularly in high-technology sectors .
Semiconductor Investment and Supply Chain Strategy
Bloomberg noted that uncertainty remains regarding Taiwan's previously announced commitments to support US semiconductor investment. Taiwan had earlier indicated plans for up to US$250 billion in direct investment in advanced semiconductor, energy and AI operations in the US, alongside US$250 billion in potential government loan guarantees.
Under the arrangement, Taiwanese companies would be allowed to ship a set amount of semiconductor chips tariff-free as US manufacturing capacity expands, and Taiwan would receive “preferential treatment” in future chip-related tariff measures, according to a US fact sheet cited by Bloomberg.
US Commerce Secretary Howard Lutnick has said he expects significant semiconductor investment from Taiwan Semiconductor Manufacturing Co. (TSMC), which pledged US$100 billion in US projects last year.
US President Donald Trump has emphasized rebuilding domestic semiconductor production as critical to economic and national security.
Taiwan's semiconductor industry, which produces roughly 90% of the world's most advanced chips, has often been described domestically as a “silicon shield,” reflecting its strategic importance.
Food Security and Public Health Measures Maintained
Taiwan said 27 key agricultural products — including rice, chicken, oysters, clams, garlic and dried red beans — will not see tariff reductions, citing food security concerns.
Taipei will permit imports of US ground beef and certain offal products while maintaining bans on sensitive items, and will align maximum residue limits (MRLs) for ractopamine in beef and pork products with international standards, according to the government statement. Country-of-origin labeling requirements and school meal procurement policies prioritizing domestic meat will remain unchanged.
Legislative Approval Pending
The agreement requires approval by Taiwan's legislature before taking effect domestically, the Executive Yuan said.
Bloomberg reported that the opposition Kuomintang has criticized the negotiations as lacking transparency and raised concerns about potential impacts on local pork producers and food safety standards.
The Executive Yuan said economic modeling suggests the tariff reductions will shift the overall impact on Taiwan's GDP and industrial employment from negative to positive.
Once the United States completes its domestic procedures, the revised tariff measures will be published in the Federal Register and enter into force.
