Taiwan’s President Offers Zero Tariffs as Basis for Talks with the US

Breaking with Reciprocal Measures

Taiwan’s President Lai Ching-te has made a bold move by offering zero tariffs as the basis for talks with the US, pledging to remove trade barriers rather than imposing reciprocal measures. In a video message released by his office, Lai emphasized that Taiwanese companies will increase their investments in the US, despite the recent tariffs imposed by President Donald Trump.

Background on the Tariffs

In a surprise move, President Trump announced across-the-board import tariffs on Wednesday, with much higher duties for dozens of trading partners, including Taiwan. Taiwan runs a large trade surplus with the US and faces a 32% duty on its products. However, the US tariffs do not apply to semiconductors, a major Taiwanese export.

Minimizing the Impact

In his video message, Lai acknowledged that the tariffs would undoubtedly have an impact on Taiwan’s economy, which is heavily dependent on trade. However, he expressed confidence that the impact could be minimized. “Tariff negotiations can start with ‘zero tariffs’ between Taiwan and the United States, with reference to the U.S.-Canada-Mexico free trade agreement,” Lai said.

No Retaliation Planned

Taiwan has no plans to take tariff retaliation, and there will be no change in Taiwanese companies’ investment commitments to the United States as long as they are in Taiwan’s interest. Taiwan’s TSMC, the world’s largest contract chipmaker, recently announced an additional $100 billion investment in the US. Lai also expressed optimism that other industries, such as electronics, information and communications, petrochemicals, and natural gas, will increase their investments in the US and deepen Taiwan-US industrial cooperation.

Prioritizing Purchases

Taiwan’s cabinet is considering large-scale agricultural, industrial, and energy purchases from the United States, while the defense ministry has already put forward its weapons purchase plans. Lai emphasized that all purchases will be actively pursued, highlighting the importance of deepening trade ties with the US.

Addressing Non-Tariff Trade Barriers

Non-tariff trade barriers are an indicator for the US to assess the fairness of trade, and Taiwan will proactively resolve non-tariff trade barriers that have existed for many years to make trade negotiations with the US smoother, Lai said.

The US-Taiwan Relationship

The US is Taiwan’s most important international backer and main source of arms, despite the lack of formal diplomatic ties. Taiwan has faced stepped-up military and political pressure from its giant neighbor China, which views the democratically governed island as Chinese territory, despite the objections of the government in Taipei. Shortly before Trump’s tariff announcement, China announced the end of its latest round of war games around Taiwan.

Confidence in the Face of Crisis

Lai expressed confidence in Taiwan’s ability to overcome global crises, citing the country’s resilience in the face of adversity. “Not only have we been able to overcome the difficulties, but we have also been able to turn crises into opportunities, transforming the Taiwanese economy into a new and more resilient one,” he said.

Conclusion

Taiwan’s President Lai Ching-te has taken a bold step by offering zero tariffs as the basis for talks with the US, signaling a commitment to removing trade barriers and increasing investment in the US. The move is seen as a strategic attempt to mitigate the impact of the tariffs and strengthen trade ties with the US.

FAQs

Q: What are the US tariffs on Taiwan?
A: The US tariffs do not apply to semiconductors, a major Taiwanese export, but Taiwan faces a 32% duty on its products.

Q: Will Taiwan retaliate against the US tariffs?
A: No, Taiwan has no plans to take tariff retaliation.

Q: What is Taiwan’s strategy for addressing non-tariff trade barriers?
A: Taiwan will proactively resolve non-tariff trade barriers that have existed for many years to make trade negotiations with the US smoother.

Q: What are Taiwan’s plans for increasing investment in the US?
A: Taiwanese companies, including TSMC, will increase their investments in the US, and other industries will also invest in the US and deepen Taiwan-US industrial cooperation.

Q: What are Taiwan’s plans for large-scale purchases from the US?
A: Taiwan’s cabinet is considering large-scale agricultural, industrial, and energy purchases from the United States, while the defense ministry has already put forward its weapons purchase plans.