The U.S. Department of Commerce signed a trade deal with Taiwan on January 15, reducing U.S. reciprocal tariffs to no more than 15%.

The reduction of reciprocal tariffs to 15% without accumulation grants Taiwan “most-favored-nation treatment” among major U.S. trade deficit countries, placing it on par with trading partners like the EU, Japan, and South Korea.

While the agreement primarily focuses on future investment plans in the U.S. and tariff incentives for Taiwan's semiconductor, chip, and high-tech industries, traditional industry sectors like hand tools and machine tools—previously subject to 20% reciprocal tariffs—along with the auto parts industry (facing 25% tariffs under Section 232 starting May 2025) will also see rates reduced to 15%.

The U.S. will apply a zero percent reciprocal tariff for generic pharmaceuticals, their generic ingredients, aircraft components, and unavailable natural resources.

Future Section 232 duties applied to Taiwanese semiconductors will reward Taiwanese semiconductor producers that invest in the U.S.

Additionally, regarding potential new items added under the U.S. Section 232 measures in the future, both Taiwan and the U.S. have also agreed to establish a mechanism for ongoing negotiation on most-favored-nation treatment.