Taiwan says 20% U.S tariff rate is temporary, aiming to get lower figure
TAIPEI--Taiwan President Lai Ching-te said on Friday that the new 20% tariff rate set by the Trump administration on goods imported from the island is 'temporary', and the government expects to negotiate a lower figure.
'The 20% tariff rate was never Taiwan's target to begin with. We will continue negotiations and strive for a rate that's more favorable for Taiwan,' he told a press briefing.
Lai also said specific rates for Taiwanese semiconductors, electronics, as well as information and communication technology are still to be worked out.
Those items, which form the backbone of Taiwan's economy and are key to the U.S. efforts to maintain its tech lead over China, are expected to have different rates than the overall Taiwan tariff rate. Rates on such items are currently the subject of a U.S. national security probe, which is being conducted under Section 232 of the Trade Expansion Act of 1962.
Lai said once the results of the probe are resolved, Taiwan's negotiating team will enter into further talks. The U.S. plans to announce the results of the probe in two weeks, Commerce Secretary Howard Lutnick said on Sunday.
A Thursday executive order from U.S. President Donald Trump imposed tariffs ranging from 10% to 41% on U.S. imports from dozens of trading partners.
While the 20% rate for Taiwan is less than the 32% threatened in April, it notably exceeds the 15% rates declared for Japan, South Korea and the European Union.
A U.S. official said Lai's statement that negotiations were continuing was 'accurate.'
'The interim rate is lower than the original rate, and it's much lower than that of several other major trading partners with ongoing negotiations. We can interpret this as Taiwan's offer being well received and being close to a final agreement,' said the official who declined to be identified, given the sensitivity of the issue.
Taiwan had the sixth-largest trade deficit with the U.S. last year, exporting about $74 billion more to the U.S. than it took in, according to data from the U.S. and Taiwan governments.
According to Yuanta Securities, the so-called reciprocal rate that currently stands at 20% would only affect about a quarter of Taiwan's exports to the United States.
'This tariff rate is only an outpost battle in the intense Taiwan-U.S. tariff negotiations,' it said in a note to clients on Friday.
Taiwan is home to TSMC, the world's biggest contract chip manufacturer and producer of advanced AI chips, as well as a raft of other semiconductor-related companies.
TSMC, which counts Nvidia and Apple as key clients, announced plans for a $100 billion U.S. investment with Trump at the White House in March. That came on top of $65 billion pledged for three plants in the state of Arizona.
The TAIEX stock index fell 1.3% in early Friday trade but later pared losses to 0.3%.
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