Taiwan hails ‘best tariff deal’ with US as China voices objections

Taiwan has defended a newly signed trade agreement with the United States as the most favourable tariff arrangement secured by any economy running a trade surplus with Washington, even as Beijing sharply criticised the accord.

The deal cuts U.S. tariffs on Taiwanese goods to 15% in exchange for $250 billion in new Taiwanese investments in the U.S. technology sector. The agreement aligns Taiwan with other major U.S. trading partners, including the European Union and Japan, which reached similar arrangements following President Donald Trump’s announcement of sweeping tariff measures.

Taiwanese Prime Minister Cho Jung-tai said the agreement represents the best tariff outcome achieved by countries with trade surpluses with the United States.

“Taiwan has successfully obtained a 15% tariff rate with no additional fees,” Cho said, adding that the deal signals Washington’s recognition of Taiwan as an important strategic partner.

Under the agreement, Taiwanese exporters secured preferential treatment for several industries. Tariffs were capped at 15% with no additional charges for automotive and wood furniture products, while certain components used in the aerospace sector will be exempt from tariffs altogether.

Trump initially proposed tariffs of 32% on Taiwanese goods before lowering the rate to 20% and ultimately agreeing to the 15% ceiling.

China, which claims Taiwan as its territory, condemned the deal. At a regular press briefing, Foreign Ministry spokesperson Guo Jiakun said Beijing opposes any agreements between Taiwan and foreign governments that carry what it views as official or sovereign implications.

The U.S. Department of Commerce described the agreement as a “historic trade deal” that will establish an economic partnership aimed at creating world-class industrial parks in the United States and accelerating the reshoring of semiconductor manufacturing.

The pact now awaits ratification by Taiwan’s parliament, where opposition lawmakers have raised concerns about its potential impact on the island’s domestic chip industry.

The timing of the deal has drawn attention, coinciding with an announcement by Taiwan Semiconductor Manufacturing Company (TSMC) that it plans to increase capital spending by up to 40% this year following a sharp rise in profits driven by demand for artificial intelligence chips.

TSMC has already pledged around $165 billion in U.S. investments and is accelerating construction of new fabrication plants in Arizona. The Commerce Department said Taiwanese chipmakers investing in the U.S. will also benefit from favourable tariff treatment, including exemptions.

Ryan Majerus, a former U.S. trade official who served under both Trump and former president Joe Biden, said the agreement’s timing was notable, particularly as legal challenges to Trump’s tariff authority continue in the U.S. Supreme Court.

Taipei, facing sustained pressure from Beijing, was eager to strengthen ties with Washington despite the uncertainty, Majerus said, adding that strategic considerations likely played a significant role in pushing the deal forward.