US experts claim that the tariffs imposed by Taiwan are deemed reasonable, suggesting a potential reduction in the rate.
The Trump administration's tariff strategy has included imposing or threatening reciprocal tariffs on countries, including Taiwan. As of August 7, 2025, a 20% tariff was scheduled to take effect on all products from Taiwan, a move delayed from its initial date of July 31, 2025.
To negotiate lower tariffs, Taiwan would likely need to engage in discussions and offer trade concessions that address concerns raised by U.S. trade policy. These concessions might include increasing imports of U.S. agricultural or manufactured goods, committing to stronger intellectual property enforcement, reducing non-tariff barriers, and enhancing cooperation on trade enforcement and dispute resolution mechanisms.
However, specific details of such concessions are not explicitly outlined in the available information from the recent tariff updates. Walters, a senior fellow at the Hudson Institute, suggests that Taiwan could potentially see a reduction in the 20% tariff if it offers more incentives to Washington and benefits the US, such as creating more jobs through investments in US markets.
Taiwan is the sixth-largest contributor to the US trade deficit, with its trade surplus with the US increasing from $47.8 billion in 2023 to $73.9 billion last year. The US has imposed tariffs on certain industries to encourage manufacturing to return to US soil, with rates as high as 50% on steel and aluminum goods.
The tariff on Taiwan is considered reasonable compared to other economies in the region. Japan, for example, earned a 15% rate by pledging to invest $550 billion in the US market. The US is open to further tariff discussions with Taiwan, as the trade deal is yet to be finalized.
US-based economics analyst Jeffrey Kuo views Trump's tariff policies as politically oriented, suggesting they lack a clear economic theory. Walters notes that it could be challenging for Taiwan to secure a lower tariff, as there is no clear indication of how low the Trump administration wants to go on tariffs.
Companies should try to seek an exclusion on semiconductors if a tariff is imposed, as Walters suggests there may be opportunities for some products to avoid a high tariff rate. Taiwan could use new investments as leverage for a lower tariff, but Walters notes that there is a part of the administration that prefers higher tariffs and may not be open to negotiations.
President William Lai of Taiwan considers the rate as provisional, implying it could change. As the negotiations continue, it remains to be seen what concessions Taiwan will offer and whether they will be enough to secure a lower tariff rate under the Trump administration.
- The US might lower the 20% tariff on Taiwan if Taiwan increases imports of American manufactured goods and makes stronger commitments to intellectual property enforcement, as Walters suggests such moves could provide benefits to the US.
- To potentially secure a lower tariff rate, Taiwan could consider investing in the US market and creating more jobs, as suggested by Senior Fellow Walters at the Hudson Institute. However, the success of these efforts may hinge on whether the Trump administration is open to negotiation and lowering of tariffs to a significant extent.
