US–Taiwan trade deal: America lowers tariff to 15%; secured 'most favoured nation' treatment, says Taipei

The United States and Taiwan deepened their commercial relations on Thursday, signing a trade deal. Under the agreement, Taiwanese imports to the US will be getting lower tariffs while the island nation has committed to purchase and invest in American products.The step confirms a framework first presented in January. Under that plan, duties applied by Washington on numerous Taiwanese exports are being reduced from 20% to 15%, alongside efforts to bring in more Taiwanese capital into the US technology industry. Before it can take effect, the pact must pass review in Taiwan’s parliament, which is controlled by the opposition. US trade representative Jamieson Greer said the deal "will eliminate tariff and non-tariff barriers facing US exports to Taiwan.""This agreement also builds on our longstanding economic and trade relationship with Taiwan and will significantly enhance the resilience of our supply chains, particularly in high-technology sectors," he added in a statement.Taiwanese vice premier Cheng Li-chiun said that the outcome improves the island’s competitive position, placing it on a "fair footing to compete with our rivals.""Compared with our competitor countries, we have even gained a relative advantage, because the gap created by FTAs that previously left us behind has effectively been closed this time," Cheng told a press conference in Washington, referring to free trade agreements.He said Taipei had obtained "Most Favored Nation" treatment and achieved a reduction in the average charge "on our exports to the US from an initial 15 percent, without stacking reciprocal tariffs, further down to an average of 12.33 percent."A fact sheet from the US Trade Representative’s office sets out Taiwan’s intention to drive a "long-term increase in its purchases of important US goods" through 2029.Those purchases are expected to cover $44.4 billion in liquefied natural gas and crude oil, $15.2 billion in civil aircraft and engines, and another $25.2 billion spanning power equipment, electricity grids and other items.The document also notes that the United States agreed to ease its tariff levels on Taiwanese products after Taipei committed to taking "significant steps to advance a stronger and more reciprocal trade relationship."In addition, Taiwan has undertaken to cut most of its own tariff barriers and open the way for preferential access for American industrial and agricultural exports.