Safeguarding the 15 percent non-stacking tariff deal Taiwan struck with the US is the government’s top priority amid a US Section 301 investigation, Premier Cho Jung-tai (卓榮泰) said yesterday.
Cho made the remarks during a question-and-answer session at the Legislative Yuan in Taipei.
Taiwan and the US in February signed the Taiwan-US Reciprocal Trade Agreement (ART), under which the US agreed to reduce tariffs on Taiwanese goods from 20 percent to 15 percent, without stacking them on existing most-favored-nation (MFN) rates.
Photo: Liao Chen-huei, Taipei Times
US President Donald Trump last year invoked the US International Emergency Economic Powers Act to impose tariffs on Taiwan and many other nations. However, the US Supreme Court on Feb. 20 ruled that the act does not grant the president authority to impose tariffs.
Trump then turned to Section 122 of the Trade Act of 1974 to impose a uniform 10 percent tariff globally, stacked on existing MFN rates, for a maximum of 150 days, while also initiating a Section 301 investigation under the Trade Act.
The Office of the US Trade Representative last month launched investigations into multiple nations, including Taiwan, over potential issues of “overcapacity” and “forced labor.”
Democratic Progressive Party Legislator Wu Ping-jui (吳秉叡) asked Cho when the tariff arrangements between Taiwan and the US would be finalized.
Cho said the US was yesterday expected to hold public hearings on “overcapacity” and on Tuesday next week on “forced labor,” adding that about a week after the hearings conclude, if the US raises any concerns regarding Taiwan, the government would respond with explanations.
As the investigation covers multiple countries, a final outcome is tentatively expected in about July, pending developments, he said.
Wu said that businesses are feeling the strain of high tariffs, but uncertainty is also a major concern.
For example, in the auto sector, companies are waiting for clarity on tariff policy, with hopes that US duties on vehicles could be lowered, but ambiguity over the levies has contributed to a slowdown in the auto market, adding pressure on the industry, he said.
The government’s top priority is to reach an early resolution so businesses can gain greater certainty and stability, while aiming to ensure that the original terms of the ART are preserved, along with the preferential treatment Taiwan secured, Cho said.
The previously negotiated 15 percent non-stacking tariff arrangement helped bolster Taiwan’s competitiveness, but after the ART was set aside and Section 122 was put in place, some product categories that had been granted exemptions have not been maintained, he said.
The government believes returning to the ART framework would provide the most comprehensive protection for industrial competitiveness and national interests, and it is working toward that goal, Cho said.
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