Taiwanese Premier: "U.S. Negotiation Team Hit a Spectacular Home Run"... Opposition Warns of "Hollowing Out" of Semiconductor Industry

15% Mutual Tariff Rate, Most-Favored-Nation Status for Semiconductors
Concerns Over Lutnick's Remarks on Transferring 40% of Semiconductor Production

With the United States and Taiwan having reached an agreement on tariffs and other trade negotiations, the Taiwanese authorities are offering highly positive assessments, likening the outcome to a "home run."

Yonhap News Agency

According to major Taiwanese media outlets on the 17th (local time), Premier Cho Jungtai of Taiwan's Executive Yuan stated, "The negotiation team scored a spectacular home run," adding, "Among all countries with a trade surplus with the United States, Taiwan has received the most preferential tariff treatment."

Previously, on the 15th, as a result of bilateral negotiations, the United States agreed to lower the mutual tariff rate with Taiwan to 15% and promised most-favored-nation status for semiconductors and other goods. In return, Taiwan committed to direct investments and credit guarantees of $250 billion each from its corporations and government in the United States. The 15% mutual tariff rate applied to Taiwan is the same as that for South Korea, Japan, and the European Union (EU). However, at the time of the announcement in April, Taiwan's tariff rate was higher at 32% compared to these countries.

Despite Taiwan's investments in the United States, Premier Cho emphasized, referring to semiconductor company TSMC, "As long as the main peak of the 'Sacred Mountain Protecting the Nation' remains in Taiwan, we can remain rooted in Taiwan, establish a global presence, and sell our products worldwide." He also stated, "It is clear that the United States regards Taiwan as an important strategic partner," expressing hope that the United States and Taiwan could establish a strategic partnership in the artificial intelligence (AI) supply chain.

Chang Chienyi, President of the Taiwan Institute of Economic Research, also remarked, "Taiwan is the first country to be announced by the United States as receiving most-favored-nation status for semiconductors and related products," adding, "This shows that the United States views Taiwan as a key strategic partner in the semiconductor sector." President Lai Ching-te expressed expectations that this agreement would strengthen Taiwan's international competitiveness and deepen advanced technology cooperation with the United States, potentially leading to increased U.S. investment in Taiwan's semiconductor industry and other sectors.

However, some media outlets, including the South China Morning Post (SCMP), reported that the opposition party, which holds a majority of seats, has expressed concerns about the potential "hollowing out" of the semiconductor industry, making parliamentary ratification challenging. In particular, controversial remarks by U.S. Secretary of Commerce Howard Lutnick-stating that the goal is to bring 40% of Taiwan's total semiconductor supply chain and production to the United States and that failure to do so could result in a 100% tariff rate-have intensified the debate.

Chu Li-yuan, chairman of the opposition Kuomintang, which is pro-China, stated, "If investing in the United States were truly attractive, companies would have done so without geopolitical pressure," and argued that "since the 15% tariff rate is the same as for South Korea and Japan, it is difficult to see this as an achievement. Excessive costs were paid to achieve the same result as other countries."

The Taiwan People's Party, another opposition party, also criticized the agreement, arguing that Taiwan's core industries were used as political bargaining chips without democratic oversight procedures.