Taiwan Braces for Massive US Tariffs: Semiconductor Exports Spared as Negotiations Intensify in High-Stakes Trade Showdown
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Taiwan Braces for Massive US Tariffs: Semiconductor Exports Spared as Negotiations Intensify in High-Stakes Trade Showdown
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As of today, the global tariff landscape has reached new heights not seen in over a century. The average US tariff rate soared from 2.5% to an estimated 27% in the first half of 2025, according to Wikipedia’s overview of the second Trump administration. In early April, President Trump specifically announced a sweeping 32% “reciprocal tariff” on Taiwanese goods. In a notable carve-out, Taiwan’s critical semiconductor exports remain exempt—a move that underscores both the economic stakes and the strategic complexity of US-Taiwan relations. Trump had earlier accused Taiwan of underinvesting in its defense and gaining an “unfair dominance” in semiconductor markets.
Taiwanese leaders denounced the tariffs as unreasonable but opted not to retaliate. Instead, Taiwan offered to boost imports from the US and drop all tariffs on American goods, trying not to escalate the situation. The political fallout at home has been immediate. Opposition parties criticized the government’s reliance on Washington and called out what they see as unpreparedness. Premier Cho Jung-tai quickly convened a cross-party legislative meeting and announced an NT$88 billion plan aimed at stabilizing the economy and supporting affected industries.
Negotiations are ongoing. The Taipei Times reports that while the US issued formal tariff notices to 14 countries on Monday—including close US allies like Japan and South Korea—Taiwan did not receive such a notice. This has fueled speculation that talks are progressing positively for Taipei. Vice Premier Cheng Li-chun and Minister Without Portfolio Yang Jen-ni are leading negotiations in Washington. President William Lai recently held a late-night videoconference with the negotiating team, reaffirming that protecting national interest, public health, and food security remains the top priority.
The 90-day suspension of reciprocal tariffs expires August 1, and 14 countries will see tariff rates between 25% and 40% kick in if no deals are reached, according to DigiTimes. For Taiwan, the current absence of a notification letter signals cautious optimism, as noted by The Straits Times.
Trump’s approach marks a sharp pivot from previous administrations, with less emphasis on ideology and more on transactional “America First” demands. Washington is pressuring major Taiwanese companies—especially semiconductor giants like TSMC—to accelerate US-based investment and adjust trade balances by importing more American products, as analyzed by China-US Focus.
Taiwan’s ability to navigate these demands without receiving the most severe tariff treatment depends on the success of ongoing talks. The outcome will shape not just the Taiwanese economy but also its broader strategic posture in the region.
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