US Imposes Sliding Tariffs on Taiwan Imports Sparking Economic Uncertainty and Diplomatic Tensions
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US Imposes Sliding Tariffs on Taiwan Imports Sparking Economic Uncertainty and Diplomatic Tensions
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This spring has seen unprecedented shifts in US trade policy. On April 2, President Trump announced a sweeping 32 percent reciprocal tariff on nearly all imports from Taiwan, excluding semiconductor products, which are Taiwan’s chief export. That move sent shockwaves through global markets, with Taiwan’s stock exchanges experiencing major losses. In response, Taiwan’s government described the tariffs as “unreasonable” but chose not to retaliate. Instead, Taipei offered to increase imports from the United States and remove tariffs on American goods, aiming to ease tensions and reopen negotiations.
Just a week later, following intense diplomatic efforts and market turmoil, the Trump administration scaled back the tariff to 10 percent for a 90-day period, granting both sides time to negotiate. This 10 percent flat tariff now applies to nearly all imports from Taiwan, as confirmed by several real-time trade trackers and government sources. Though this pause has brought brief relief, uncertainty still looms over what comes next for Taiwan’s critical industries like manufacturing and technology.
Taiwan’s Premier, Cho Jung-tai, presented an NT$88 billion support package—equivalent to about US$2.7 billion—to help the country’s industries weather this new tariff environment. According to the Taiwanese National Development Council, a full return to the higher 32 percent tariff could result in a 5 percent drop in Taiwan’s manufacturing production value, potentially dealing a severe blow to the economy.
Despite President Lai’s roadmap for deepening US-Taiwan trade ties, negotiators from Taipei face an uphill battle. Trump’s administration has made clear its “America First” agenda, with the president previously criticizing Taiwan’s dominance in the global semiconductor sector and calling for greater defense spending from Taipei. Critics within Taiwan, including the opposition Kuomintang, have argued that these tariffs undermine President Lai’s strategy of relying on US support to counter China. They have also questioned the government’s preparedness and called for a more robust response.
Meanwhile, Trump has continued to wield tariffs as his preferred foreign policy tool, frequently touting tariffs as “the most beautiful word in the dictionary.” His actions have created ripple effects not just for Taiwan, but for the entire global trading system, with markets losing trillions of dollars since the early April announcements and trading partners scrambling to secure more favorable deals.
As the 90-day negotiation window progresses, listeners should expect rapid developments. Taiwan is among the first countries lined up for tailored talks with the Trump administration. The outcome will have lasting consequences for Taiwan’s economy, its industries, and the broader US-Taiwan relationship.
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