Taiwan and the United States have signed a reciprocal trade agreement establishing a 15% reciprocal tariff framework without additional overlapping tariffs.

The agreement also confirms that US-manufactured passenger vehicles imported into Taiwan will be eligible for zero tariffs.

Led by Vice Premier Cheng Li-chun, Taiwan's negotiation team travelled to Washington, D.C. on February 12th (Eastern Time) to finalise and sign the reciprocal trade arrangement.

Under the agreement, Taiwan's reciprocal tariff rate will be reduced to 15% and will not be layered on top of the existing Most-Favoured-Nation (MFN) tariff structure. The calculation method aligns with tariff frameworks adopted by Japan, South Korea and the European Union.

The Executive Yuan plans to fast-track the submission of the agreement to the Legislative Yuan for review under the Treaty Conclusion Act, while also submitting a Taiwan-US investment memorandum of understanding for legislative support.

Under Section 232 tariff provisions in the United States, Taiwan has secured MFN treatment for several export categories, including semiconductors and related components, automotive parts, timber furniture, and aerospace components such as steel, aluminium and copper derivatives.

In total, 2,072 Taiwanese export products to the United States will be exempt from additional reciprocal tariffs, meaning that these goods will be subject only to standard MFN tariff rates. Approximately 20% of Taiwan's exports that were previously affected by tariffs will no longer face additional reciprocal duties.

The agreement includes a tariff reduction on US-made imported passenger vehicles, decreasing from 17.5% to zero. However, tariffs on small and medium-sized trucks will remain in place to maintain defence-related industrial capacity.

According to previous evaluations by the Ministry of Economic Affairs, assuming full tariff elimination, the output value of the domestic automotive industry could decline by slightly more than 1%. The short-term impact is expected to be limited, while the medium- and long-term effects on the industry remain under observation.

Previous restrictions related to import quotas and safety certification requirements for US-specification vehicles will be eased. The agreement removes quantity limitations for vehicles that comply with US federal safety regulations.

However, imported vehicles must continue to meet certification requirements in Taiwan. US manufacturers will be required to provide compliance documentation, apply for safety certification through the Ministry of Transportation and Communications and obtain three separate certificates covering energy consumption, emissions and noise compliance from both the Ministry of Economic Affairs and the Ministry of Environment. Vehicles may be released for sale only after passing verification by Taiwanese inspection authorities.

The government plans to establish a regulatory audit and supervision system for US-specification vehicles.

Regulatory alignment and testing certification procedures are expected to be completed within six months after the agreement takes effect.

Qualified US-specification vehicles may enter the Taiwanese market once all required documentation has been approved.