Taiwan hopes to secure a competitive tariff rate with the US by leveraging Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$165 billion investment in the US, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday.
Compared with Japan and South Korea, Taiwan could secure a more favorable tariff rate due to TSMC’s investment, Kuo told a meeting of the legislature’s Economics Committee in Taipei.
The US on July 7 announced a 25 percent tariff on Japan and South Korea, which is scheduled to take effect on Aug. 1.
Photo: CNA
Vice Premier Cheng Li-chiun (鄭麗君) is leading a delegation to the US this week for a fourth round of tariff negotiations, Kuo said, adding that the ministry hopes the delegation could secure a rate favorable to local businesses and better than those offered to competitors.
Meanwhile, Democratic Progressive Party Legislator Chiu Chih-wei (邱志偉) urged the ministry to refute allegations that the government had received a 32 percent US tariff notice, but is withholding information until after recall elections.
Kuo agreed, saying he had no idea where the allegations originated.
The government would strive to secure a better rate, Kuo said, adding that the US has suggested that the deadline could be extended if no deal is reached.
It is important to understand US President Donald Trump’s negotiation style, he said.
Taiwanese products, particularly semiconductors, which are impacted by the investigation launched by the US under Section 232 of the US Trade Expansion Act, are vital to the US, Kuo said.
The US has high expectations for Taiwan’s export controls and border protection in the tariff negotiations, and is closely watching legislative debates over proposed cuts to defense and coast guard budgets, he said.
The ministry is also considering increasing natural gas imports from Alaska, as US investment and Trump’s “Make America Great Again” motto remain key themes in the tariff negotiations, he added.
“As there is still much to be invested, we must weigh whether the investment is necessary and whether it is a long-term commitment or a short-term transaction. I believe our delegation understands that clearly,” Kuo said.
Natural gas from the US made up about 10 percent of Taiwan’s total energy imports, and the ministry aims to raise that to 20 to 30 percent, he said in April, adding that Taiwan also plans to invest about NT$200 billion (US$6.8 billion) in advanced US technologies over 10 years.
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