Trump Tariffs Unresolved: Taiwan-U.S. Negotiations Must Be Fought for
The world is watching the U.S. Supreme Court’s ruling on the Trump tariffs, but the decision has not yet been issued. At this moment, Taiwan’s trade delegation has returned to the United States, and Taiwan-U.S. tariff negotiations can still move forward quickly.
The Taiwan-U.S. trade agreement already has a clear framework: Taiwan’s tariffs will be reduced from 20% to 15% without stacking, in line with Japan, South Korea and the European Union; Taiwan agrees to invest over $300 billion in the United States; Taiwan Semiconductor Manufacturing Company has committed to building five more semiconductor factories in Arizona. At the same time, Taiwan will receive preferential treatment under Section 232 of the Trade Expansion Act.
Experts believe that if Donald Trump loses on the tariffs, the most likely measure will be to use Section 122 of the Trade Act of 1974 to fill the power vacuum after the court ruling. The law states that the U.S. president may invoke Section 122 in the event of a serious balance-of-payments crisis, allowing temporary tariffs of up to 15% for 150 days.
Therefore, whether Trump’s tariffs win or lose, under Section 122, countries with tariffs below 15%, such as Taiwan, Japan, South Korea, as well as the EU, will not renegotiate. If Trump’s tariffs are struck down, for countries with tariffs above 15% — China, India, Switzerland, Canada, Mexico, Vietnam — the Trump administration will propose alternatives to compensate for lost revenue. Trump’s business-minded approach clearly follows the principle of “losing here, gaining there"; if his tariffs are ruled illegal, he will implement a Plan B to supplement U.S. revenue, potentially exceeding the $200 billion collected in 2025, a process that could trigger major global economic fluctuations.
According to the disclosed framework, TSMC will build five more 2-nanometer advanced semiconductor factories. Together with the previous six, TSMC will have 11 fabs in the U.S., mostly advanced process fabs. The U.S. will become the main global production base for advanced processes.
TSMC’s advanced processes are unique in the world, built over 30 years. Moving these advanced processes to the U.S. led to a reduction of Taiwan’s tariffs from 20% to 15%. TSMC has effectively saved all Taiwanese industries by lowering tax rates, but the cost is high. Did the Lai administration make this decision because it could not resist U.S. pressure or was powerless to do so? Is it a case of being manipulated? TSMC's becoming “America Semiconductor” is no longer a topic for discussion but an established reality. For Taiwan, if it accepts the heavy Taiwan-U.S. trade framework, two additional demands must be made to the U.S.
First, all Taiwanese industries should be fully exempt from Section 232 national security tariffs. This section targets specific industries precisely, and currently imposes tariffs of up to 50% on Taiwanese steel, aluminum, copper, auto parts and transformers; yesterday, the Trump administration announced a 25% tariff on some imported semiconductors. Taiwan requests that all industries affected by Section 232 receive full exemption.
Second, Section 338 discriminatory countermeasures should not be applied to Taiwan. Section 338 states that if the president determines that any country maintains trade barriers against U.S. agricultural products, automobiles, or has a large trade surplus with the U.S., he may declare the country discriminatory and impose 50% tariffs or a total embargo. Taiwan’s trade surplus with the U.S. in 2025 reached $150.1 billion, a historic high, more than double the previous year, and its ranking rose from sixth to fourth among countries with trade surpluses. Such a large surplus should not be used as a reason for the U.S. to impose heavy tariffs, and Taiwan requests full exemption under this clause.
Trump’s Plan B, in addition to Sections 122, 232 and 338, includes two other trade weapons of which Taiwan must be wary. Section 301 on unfair trade retaliation allows investigations against partners for unfair practices such as intellectual property infringement or currency manipulation; it may also impose 25% tariffs on Taiwanese products containing Chinese components, including transshipped or “washed” products. The 1930 Tariff Act’s antidumping and countervailing duties allow imposing multiple-level tariffs on certain products from specific countries, as with Chinese aluminum foil (188%) and Vietnamese solar panels (813%), intended to remove certain foreign goods from the U.S. market. These five trade tools are all within the Trump administration’s discretionary power and may be selectively used.
Taiwan invests heavily in the U.S. TSMC was one of the earliest Taiwanese companies to invest in the U.S., committing $165 billion. Under the new agreement, TSMC will build five additional semiconductor factories, each with at least $22 billion in investment; five factories total $110 billion. Including AI companies and TSMC’s supply chain, they already have facilities in the U.S. Adding annual military purchases, commodities and energy — the total investment exceeds $300 billion.
The Lai administration has already “traded investment for exemptions, TSMC for tax reductions, and defense purchases for security.” While these measures help the Taiwan-U.S. trade agreement, U.S. demands are excessive, potentially hollowing out Taiwan’s industries, transferring talent, technology and capital to the U.S. — a serious challenge Taiwan must face.
The Taiwan-U.S. trade framework should be finalized quickly so that all Taiwanese companies can return to production lines and compete internationally in an orderly manner.
The Taiwan-U.S. trade agreement already has a clear framework: Taiwan’s tariffs will be reduced from 20% to 15% without stacking, in line with Japan, South Korea and the European Union; Taiwan agrees to invest over $300 billion in the United States; Taiwan Semiconductor Manufacturing Company has committed to building five more semiconductor factories in Arizona. At the same time, Taiwan will receive preferential treatment under Section 232 of the Trade Expansion Act.
Experts believe that if Donald Trump loses on the tariffs, the most likely measure will be to use Section 122 of the Trade Act of 1974 to fill the power vacuum after the court ruling. The law states that the U.S. president may invoke Section 122 in the event of a serious balance-of-payments crisis, allowing temporary tariffs of up to 15% for 150 days.
Therefore, whether Trump’s tariffs win or lose, under Section 122, countries with tariffs below 15%, such as Taiwan, Japan, South Korea, as well as the EU, will not renegotiate. If Trump’s tariffs are struck down, for countries with tariffs above 15% — China, India, Switzerland, Canada, Mexico, Vietnam — the Trump administration will propose alternatives to compensate for lost revenue. Trump’s business-minded approach clearly follows the principle of “losing here, gaining there"; if his tariffs are ruled illegal, he will implement a Plan B to supplement U.S. revenue, potentially exceeding the $200 billion collected in 2025, a process that could trigger major global economic fluctuations.
According to the disclosed framework, TSMC will build five more 2-nanometer advanced semiconductor factories. Together with the previous six, TSMC will have 11 fabs in the U.S., mostly advanced process fabs. The U.S. will become the main global production base for advanced processes.
TSMC’s advanced processes are unique in the world, built over 30 years. Moving these advanced processes to the U.S. led to a reduction of Taiwan’s tariffs from 20% to 15%. TSMC has effectively saved all Taiwanese industries by lowering tax rates, but the cost is high. Did the Lai administration make this decision because it could not resist U.S. pressure or was powerless to do so? Is it a case of being manipulated? TSMC's becoming “America Semiconductor” is no longer a topic for discussion but an established reality. For Taiwan, if it accepts the heavy Taiwan-U.S. trade framework, two additional demands must be made to the U.S.
First, all Taiwanese industries should be fully exempt from Section 232 national security tariffs. This section targets specific industries precisely, and currently imposes tariffs of up to 50% on Taiwanese steel, aluminum, copper, auto parts and transformers; yesterday, the Trump administration announced a 25% tariff on some imported semiconductors. Taiwan requests that all industries affected by Section 232 receive full exemption.
Second, Section 338 discriminatory countermeasures should not be applied to Taiwan. Section 338 states that if the president determines that any country maintains trade barriers against U.S. agricultural products, automobiles, or has a large trade surplus with the U.S., he may declare the country discriminatory and impose 50% tariffs or a total embargo. Taiwan’s trade surplus with the U.S. in 2025 reached $150.1 billion, a historic high, more than double the previous year, and its ranking rose from sixth to fourth among countries with trade surpluses. Such a large surplus should not be used as a reason for the U.S. to impose heavy tariffs, and Taiwan requests full exemption under this clause.
Trump’s Plan B, in addition to Sections 122, 232 and 338, includes two other trade weapons of which Taiwan must be wary. Section 301 on unfair trade retaliation allows investigations against partners for unfair practices such as intellectual property infringement or currency manipulation; it may also impose 25% tariffs on Taiwanese products containing Chinese components, including transshipped or “washed” products. The 1930 Tariff Act’s antidumping and countervailing duties allow imposing multiple-level tariffs on certain products from specific countries, as with Chinese aluminum foil (188%) and Vietnamese solar panels (813%), intended to remove certain foreign goods from the U.S. market. These five trade tools are all within the Trump administration’s discretionary power and may be selectively used.
Taiwan invests heavily in the U.S. TSMC was one of the earliest Taiwanese companies to invest in the U.S., committing $165 billion. Under the new agreement, TSMC will build five additional semiconductor factories, each with at least $22 billion in investment; five factories total $110 billion. Including AI companies and TSMC’s supply chain, they already have facilities in the U.S. Adding annual military purchases, commodities and energy — the total investment exceeds $300 billion.
The Lai administration has already “traded investment for exemptions, TSMC for tax reductions, and defense purchases for security.” While these measures help the Taiwan-U.S. trade agreement, U.S. demands are excessive, potentially hollowing out Taiwan’s industries, transferring talent, technology and capital to the U.S. — a serious challenge Taiwan must face.
The Taiwan-U.S. trade framework should be finalized quickly so that all Taiwanese companies can return to production lines and compete internationally in an orderly manner.
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