Taiwan-US Tariff Negotiation Update: 20% Temporary Tariff Set, Further Talks to Seek Reduction

On July 31, 2025, the White House announced a 20% “reciprocal tariff” on Taiwanese imports, effective from August 7. This rate is lower than the previously announced 32% in April, but still higher than the 15% set for Japan and South Korea. In the first half of 2025, Taiwan’s exports to the US grew by 51.4% year-on-year, and the 2024 trade surplus reached a record high of $73.93 billion, a key factor for US tariff pressure.

Key details:

• Taiwan’s government and trade negotiators emphasize the 20% tariff is temporary and subject to change; negotiations are ongoing to seek better rates and incorporate Section 232 clauses.
• The tariff is notably milder than China’s 37.5-55% and below last year’s US proposals, but higher than Japan and Korea.
• Taiwan’s June exports to the US surged by 90.9% YoY; January–June cumulative growth hit 51.4%, with surpluses reaching new records. The key drivers are AI, electronics, and ICT products.
• The July export data, to be released August 8, will indicate if the new US tariff triggers a turning point in export growth.
• The 20% tariff may impact exports from Taiwan’s traditional industries, especially in central and southern regions, and prompt manufacturers to renegotiate pricing with clients.

In summary, the Taiwan-US tariff talks are ongoing under confidentiality until an agreement is reached, but the US has shown willingness for further negotiation and the tariff may still be reduced. Taiwan’s exports grew 25.92% YoY in the first half of 2025, and the trade surplus was up 54.31%, indicating continued strong export resilience. However, the outlook for the second half faces headwinds from the new US tariff policy and global geopolitical risks, likely softening future demand. The market focus on AI and semiconductors may partly offset policy impacts in the long run, but short-term volatility, especially in the stock market and traditional sectors, is expected to remain pronounced as talks progress and outcomes unfold.