Taiwan is awaiting official notification from the US regarding the status of the Agreement on Reciprocal Trade after the US Supreme Court ruled that US President Donald Trump’s “reciprocal” tariffs were unconstitutional, Premier Cho Jung-tai (卓榮泰) told reporters at the legislature in Taipei yesterday.
Taiwan’s negotiation team remains focused on ensuring that the bilateral trade deal remains intact despite the legal challenge to Trump’s global tariff policy, Cho said ahead of a legislative hearing.
“The US has pledged to notify its trade partners once the subsequent administrative and legal processes are finalized, and that certainly includes Taiwan,” Cho said when asked about doubts expressed by members of the opposition that the trade agreement was still valid.
Photo: Lo Pei-de, Taipei Times
“This is the most current update we have,” he said.
The trade deal, which was signed on Feb. 12, established a 15 percent tariff on Taiwanese goods and included provisions exempting 1,735 categories of goods from “reciprocal” duties.
Combined with another 337 categories exempted for all US trading partners under a Trump executive order, the exemptions would bring the average effective tariff on Taiwan’s exports under the US tariff policy down to 12.33 percent, officials estimated.
The agreement was originally slated for submission to the Legislative Yuan for deliberation alongside a memorandum of understanding (MOU) on Taiwan-US investment that was signed on Jan. 15.
The legal landscape shifted when the court ruled that the Trump administration’s use of the International Emergency Economic Powers Act to impose its “reciprocal” tariffs exceeded executive authority.
In a swift countermove, Trump signed a proclamation invoking Section 122 of the Trade Act to impose a global 15 percent tariff based on balance-of-payments authority.
However, the US government has only imposed a 10 percent tariff on global imports under Section 122, lower than the average effective tariff of 12.33 percent agreed to in the deals.
Vice Premier Cheng Li-chiun (鄭麗君) on Tuesday last week said that the court’s ruling would not undermine the core benefits Taiwan secured under the agreement signed last month.
Beyond the benefits of last month’s deal, provisions of the MOU continue to provide Taiwan with preferential treatment regarding potential tariffs stemming from Section 232 investigations conducted according to the US Trade Expansion Act, Cheng said.
Meanwhile, the US Trade Representative’s office on Monday said that the Trump administration’s Trade Policy Agenda for this year would include finalizing the trade deal with Taiwan.
The office said that it would also seek further reductions in foreign tariffs and non-tariff barriers this year, enforce its “reciprocal” trade deals and consider launching new unfair trade practice investigations.
Additional reporting by Reuters
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