Analysis: What Does the New US Trade Deal Mean for Taiwan?

TaiwanPlus News

Taiwan and the US have inked a new trade agreement to lower US tariffs on Taiwanese goods. To find out what this means for Taiwan's greater business ecosystem, Leslie Liao spoke with Roy Chun Lee, Taiwan's former deputy foreign minister.

Transcript

00:00Can I get your impressions of this trade deal overall?

00:03First of all, Taiwan is running a higher trade surplus, well, deficit from the U.S. perspective

00:10than most other competitors, especially South Korea and Japan.

00:18And secondly, because Taiwan is really leading the world negotiation in terms of the

00:26article 232 investigation on high tech and semiconductor.

00:32And lastly, of course, we have been able to

00:37receive one of the most favorite tariff treatments among all major trading partners with the U.S.

00:46So I think that's the minimal three benchmarks I use to make the assessment that after spending

00:52extra time to negotiate, that is probably one of the best outcomes we are able to achieve.

00:59What do you think this tariff means for Taiwanese businesses, in particular, the semiconductor industry?

01:05So about 30 percent of our exports are now subject to this reciprocal tariff of 15 percent or previously

01:1320 percent. But there are around 70 percent of Taiwan's products at this moment is exporting to

01:20the U.S. tariff-free. And most of these products are high-tech products, including especially semiconductors.

01:30You see, the U.S. hasn't really published the final determination of the tariff for the high-tech 232

01:38investigation. The White House published an executive order indicating that for the next 90 days,

01:47it will be 25 percent for the high-tech products. And they urge all countries to start negotiating with the U.S.

01:54But the best part is that we were able to receive a tariff-free quarter for those Taiwanese companies

02:03who are investing and all have already invested in the U.S. And we have the quarter, I speak,

02:11hopefully big enough for most of the Taiwanese high-tech companies to enjoy a zero-tariff

02:17treatment when they do trade with the U.S.

02:20The legislature still needs to review this trade deal. Do you see any barriers to the

02:26implementation of this trade deal here in Taiwan?

02:29We saw, I would say, a broad opposition from the opposition parties on many of the agendas,

02:37even though many of the, especially the trade deals, are actually for Taiwan's benefit.

02:42So I would say the uncertainty comes from the domestic political kind of dialogue situation,

02:50rather than the outcome or the quality of the trade deal.

02:54And that's the source of uncertainty once we send the trade deal for review into the parliament.

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