Taiwan gains early protection against future US semiconductor tariffs – Firstpost

Taiwan has secured advance preferential treatment against any future US semiconductor tariffs under a bilateral trade agreement signed earlier this year, offering a degree of protection to the island’s globally critical chip industry even as Washington continues to examine import restrictions on strategic technologies.

Taiwan Vice Premier Cheng Li-chiun said on Thursday that the United States currently has no fixed timetable for imposing semiconductor tariffs under Section 232 investigations, but Taipei had already negotiated safeguards for Taiwanese companies through a January trade arrangement with Washington.

The comments come amid growing US scrutiny of semiconductor supply chains under national security provisions that allow Washington to impose tariffs on imports deemed strategically sensitive.

Speaking in Taipei, Cheng said the US had repeatedly indicated that semiconductors could eventually become subject to Section 232 tariffs, but Taiwan had secured “most-favoured-nation treatment” for its chip sector in advance.

Under the agreement, Taiwanese companies investing in the United States would continue to receive corresponding preferential treatment even if future semiconductor tariffs are introduced, she said.

“These pre-secured preferential treatments will remain unchanged,” Cheng added, while noting that the US government had not communicated any concrete timeline for semiconductor tariff measures.

According to a notice in the US Federal Register, Washington is also removing or reducing some tariffs to 15 per cent on selected Taiwanese imports, including auto and aircraft parts, wood products and steel. The tariff adjustments are retroactively effective from May 1 and are expected to be formally published on Thursday US time.

The developments underline the increasingly strategic nature of US-Taiwan economic ties as Washington seeks to reduce dependence on China-centric technology supply chains while strengthening semiconductor manufacturing capacity domestically.

Taiwan is home to Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker and a key supplier to global technology companies including Apple, NVIDIA and Advanced Micro Devices.

TSMC has emerged as a central player in the US semiconductor reshoring strategy and is investing $165 billion in fabrication facilities in Arizona, one of the largest foreign manufacturing investments in the United States.

The investment push aligns with broader US efforts to localise advanced chip production amid rising geopolitical tensions and concerns over the vulnerability of semiconductor supply chains concentrated in East Asia.

Section 232 investigations, conducted under US trade law on national security grounds, have previously been used by Washington to justify tariffs on products including steel, aluminium and automobiles. Extending such measures to semiconductors could have significant implications for global electronics manufacturing and trade flows.

Taiwan’s early negotiations with Washington suggest Taipei is seeking to insulate its crucial chip sector from potential future disruptions while deepening its strategic economic alignment with the United States.