In response to sweeping new U.S. tariffs introduced by former President Donald Trump, Taiwan’s President Lai Ching-te has proposed a bold move—offering to eliminate all tariffs in a potential trade deal with the United States. Lai emphasized that Taiwan would not retaliate with its own tariffs, but instead would seek deeper trade and investment ties.
Trump’s Tariffs Hit Global Trade Partners
Trump’s latest trade policy includes blanket import tariffs, with particularly high duties on countries running significant trade surpluses with the U.S.—Taiwan among them. The island nation now faces a 32% tariff on its goods. However, the new rules notably exclude semiconductors, one of Taiwan’s key exports.
Despite the immediate economic challenge, Lai suggested that the impact could be mitigated through strategic cooperation. “Tariff negotiations can start with ‘zero tariffs’ between Taiwan and the United States, with reference to the U.S.-Canada-Mexico free trade agreement,” Lai said in a video message released after meeting with local business leaders.
No Retaliation, But More Investment in U.S.
Lai made it clear that Taiwan would not pursue retaliation. Instead, he reaffirmed that Taiwanese companies would maintain and even expand their U.S. investments if it serves Taiwan’s national interest. “There will be no change in Taiwanese companies’ investment commitments to the United States as long as they are in Taiwan’s interest,” he added.
One major player, TSMC—the world’s largest contract chipmaker—recently announced a $100 billion expansion in the U.S. Lai noted that this would be followed by increased investments in other sectors such as electronics, petrochemicals, and energy.
Strengthening Trade Ties and Addressing Barriers
Taiwan’s government is actively exploring ways to strengthen economic ties with the U.S. Lai said the cabinet is currently reviewing large-scale purchases of agricultural, industrial, and energy products from the United States. In addition, Taiwan’s defense ministry has outlined plans for new weapons purchases, reflecting the island’s broader effort to deepen cooperation.
“All purchases will be actively pursued,” Lai affirmed. He also noted that Taiwan would address long-standing non-tariff trade barriers to help smooth out future negotiations. “Non-tariff trade barriers are an indicator for the U.S. to assess the fairness of trade, and Taiwan will proactively resolve non-tariff trade barriers that have existed for many years,” he said.
Geopolitical Pressures Add to Trade Urgency
Taiwan’s strategic posture is influenced not just by trade, but also by increasing pressure from China. While the U.S. remains Taiwan’s most important international partner and primary arms supplier, tensions with Beijing remain high. Just before Trump’s tariff announcement, China concluded military exercises near Taiwan, underscoring the island’s precarious geopolitical position.
Lai pointed to Taiwan’s resilience in the face of past global crises, expressing confidence that the country can adapt once again. “Not only have we been able to overcome the difficulties, but we have also been able to turn crises into opportunities, transforming the Taiwanese economy into a new and more resilient one,” he said.