The Ministry of Economic Affairs (MOEA) on Friday said a tariff deal with the US has not yet been finalized, rejecting a Financial Times report earlier that day saying that Taiwan would commit to investing US$400 billion in the US for a lower rate.
Minister of Economic Affairs Kung Ming-hsin (龔明鑫) told reporters that a deal with Washington has not been struck, adding that Vice Premier Cheng Li-chiun (鄭麗君), Taiwan’s lead negotiator in tariff talks with the US, and the Office of Trade Negotiations would make the deal public once it is confirmed.
Asked whether a deal would be reached soon, Kung said: “We are working hard on it.”
Photo: CNA
The Financial Times cited an unnamed US official as saying a draft tariff agreement indicated that Taipei would pledge an investment amount between the US$350 billion promised by South Korea and the US$550 billion agreed with Japan, in exchange for lower US tariffs.
The official said Taiwan would commit to a US$400 billion investment in the US.
“The difference is that in Taiwan’s case, these are not something vague, but investments that are being planned or even under way already,” the report cited the official as saying.
Two people briefed on the draft tariff deal said the commitments from Taiwan Semiconductor Manufacturing Co (TSMC) would be part of Taiwan’s total investment promises, the Financial Times said.
TSMC is investing US$65 billion for its advanced semiconductor manufacturing operations in Arizona, and has pledged an additional US$100 billion to build three new fabs, two advanced packaging facilities, and one research and development center. The chipmaker’s first fab in Arizona started mass production in the fourth quarter of last year.
The Office of Trade Negotiations said the negotiation team continues to hold talks with its US counterpart through videoconferences and document exchanges, adding that the team hoped to strike a deal as soon as possible, so that they could move to the next stage and forge closer bilateral economic cooperation.
The negotiation team is exploring possible supply chain collaborations with the US under a “Taiwan model,” as one way to reduce the 20 percent tariff imposed by Washington, the office said.
Taiwan is also seeking a “most favored nation” treatment under Section 232 of the US Trade Expansion Act, as Washington conducts a national security investigation aimed at deciding on tariffs for semiconductors and other devices, it added.
The negotiation team is trying to ensure that any adjusted tariff rate would not be added to the existing most-favored-nation tariffs, the office said.
Under a Taiwan model supply chain cooperation, Taiwanese enterprises would map out US investment plans on their own, taking advantage of geographic proximity to their clients to boost their competitive edge, it said.
The government would provide financial guarantees to these local investors to help them build industrial clusters in the US while they seek a better investment environment and preferential investment terms from the US government through “government to government cooperation,” the office said.
The Taiwan model is different from the US’ investment models with Japan and South Korea, it said, adding that it cannot be directly compared.
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