Taiwan eyes zero tariffs with US, pledges more investment

Amid escalating trade tensions with the United States, Taiwan’s incoming President Lai Ching-te has proposed a zero-tariff trade framework and pledged deeper economic cooperation, positioning Taiwan as a willing partner rather than a retaliatory actor in response to sweeping U.S. import duties.

On Sunday, Taiwan's President Lai Ching-te proposed launching trade talks with the United States based on a “zero tariff” framework, signaling a cooperative approach in response to newly announced U.S. import duties. Rather than imposing reciprocal tariffs, Lai emphasized Taiwan’s readiness to eliminate trade barriers and reaffirmed the country’s commitment to increasing investment in the U.S.

This comes in the wake of President Donald Trump’s announcement of sweeping tariffs targeting numerous trading partners, including Taiwan. The new policy imposes a 32% duty on Taiwanese goods, although it notably excludes semiconductors—one of Taiwan’s largest and most critical exports.

In a video message released by his office after a meeting with small and medium-sized business leaders, Lai acknowledged the economic pressure the tariffs could create for Taiwan’s trade-dependent economy but expressed confidence that the impact could be managed.

“Tariff negotiations can begin from a foundation of ‘zero tariffs’ between Taiwan and the United States, drawing on models like the U.S.-Mexico-Canada Agreement,” Lai said.

He stressed that Taiwan does not plan to retaliate with its own tariffs and confirmed that Taiwanese companies will maintain and expand their investments in the U.S., provided these investments serve Taiwan’s national interests.

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading contract chipmaker, recently pledged an additional $100 billion investment in the U.S.—a move Lai described as part of a broader wave of industrial collaboration. He added that other key sectors, including electronics, information and communications technology, petrochemicals, and natural gas, are also poised to ramp up investment in the U.S., further strengthening bilateral industrial cooperation.

Taiwan’s Cabinet is currently reviewing large-scale procurement plans for U.S. agricultural, industrial, and energy products, while the Ministry of National Defense has already submitted its weapons acquisition proposals.

“All purchases will be actively pursued,” Lai stated.

He also pledged to resolve longstanding non-tariff trade barriers, noting that such efforts are critical to ensuring fair trade and smooth negotiations with Washington.

Despite lacking formal diplomatic ties, the United States remains Taiwan’s most important international partner and its main arms supplier. This relationship has gained renewed importance as Taiwan continues to face heightened military and political pressure from China, which views the island as part of its territory—an assertion firmly rejected by Taipei.

China concluded its most recent round of military exercises around Taiwan shortly before Trump’s tariff announcement.

President Lai closed with a message of confidence and resilience: “Taiwan has faced major global crises before. Not only have we overcome these challenges—we’ve turned them into opportunities, reshaping our economy into one that is more dynamic and resilient than ever.”

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