Taiwan Seeks Zero-Tariff Deal with US: Will It Succeed?

As Taiwan pushes for zero-tariff trade talks with the U.S., the backdrop of rising tariffs and geopolitical tensions adds layers of complexity.

Quick Takes

Taiwan’s proposal for zero tariffs aims to counterbalance recent U.S. tariff increases.
The focus is on increasing U.S. imports of agriculture and energy goods to strengthen bilateral ties.
China’s territorial ambitions over Taiwan continue to challenge international discussions.
Ongoing significant Taiwanese investments in the U.S. are key negotiation points.

Taiwan’s Economic Strategy

Taiwan, led by President Lai Ching-te, has proposed zero tariffs as a basis for trade talks with the U.S., parallel to the USMCA model. This approach reflects Taiwan’s strategic focus on trade, as it seeks to alleviate the impact of new U.S. tariffs targeting its products, excluding semiconductors.

The strategy pivots on strengthening economic ties rather than retaliation, increasing imports of American agriculture and energy goods. President Lai underscores Taiwan’s commitment to these negotiations, as trade remains a critical factor in its economic stability.

Geopolitical Context

The geopolitical landscape, complicated by China’s claims over Taiwan, influences these trade discussions. China’s military activities near Taiwan underscore persistent tensions, limiting the scope for purely economic dialogue. Despite threats from China, Taiwan continues with its non-retaliation stance and investment in U.S. industries, such as electronics and natural gas.

Continued Taiwanese investments, including TSMC’s $100 billion commitment, signal an intent to deepen economic engagements with the U.S., deflecting friction arising from trade imbalances. Taiwan’s strategic decision refrains from escalating trade tensions through reciprocal tariffs.

Q&A session with Singapore's Senior Minister @leehsienloong, Singapore Maritime week, 24th Mar 2025:

Ambassador Chan Heng Chee (CHC): Excellencies, ladies and gentlemen. Allow me first to thank the Senior Minister for his clear and wide-ranging speech. You have given us a lot of…

— Senecat (@Senecat123) March 26, 2025

Global Trade Ramifications

International markets respond negatively to new U.S. tariff policies affecting global trade dynamics. Taiwan, while navigating its position, aims to strengthen its economic alliance with the U.S., offsetting potential economic losses with increased U.S. purchases and maintaining a diplomatic approach amid provocative regional actions by China.

The global reaction to U.S. trade measures highlights the intricacies of international trade policies. Taiwan’s decision to engage rather than retaliate aligns with its broader economic interest strategy, leveraging investments and trade relations to foster future dialogues.