Taiwan Looking at Zero Tariffs, More Investment With US

Despite a lack of formal diplomatic ties, the United States is Taiwan’s most critical international supporter and its main source of arms.
Taiwan Looking at Zero Tariffs, More Investment With US
Children view the area from a lookout point over cranes and containers at the Port of Keelung, Taiwan, on April 3, 2025. Ann Wang/Reuters
Jacob Burg
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Taiwanese President Lai Ching-te on April 6 said his nation would offer zero tariffs and no retaliation as the start of negotiations with the United States while vowing to remove trade barriers.

Lai said Taiwanese companies will also increase their investments in the United States. The comments were made in response to sweeping import tariffs announced by President Donald Trump on April 2. Taiwan has a trade surplus with the United States and will see a 32 percent tariff on its exports to the United States.

The new tariffs do not, however, affect semiconductors, one of Taiwan’s largest exports.

While meeting with executives from small and medium-sized companies at his residence, Lai noted that because Taiwan depends on trade, its economy may face difficulties dealing with U.S. tariffs but that their effects could be minimized.

“Tariff negotiations can start with ‘zero tariffs’ between Taiwan and the United States, with reference to the U.S.-Canada-Mexico free trade agreement,” he said. Trump has said anything that is compliant with the U.S.–Canada–Mexico agreement will not be subject to additional tariffs.

In comments provided by his office, Lai added that he has no plans for tariff retaliation and that there will be no change in Taiwanese business investment commitments to the United States as long as they are in his nation’s interest.

Taiwan Semiconductor Manufacturing Company (TSMC), the largest contract chipmaker in the world, announced an additional $100 billion investment in the United States last month.

“In the future, in addition to TSMC’s increased investment, other industries, such as electronics, information and communications, petrochemicals, and natural gas, will be able to increase investment in the U.S. and deepen Taiwan–U.S. industrial cooperation,” Lai said.

Lai added that his Cabinet is considering what extensive agricultural, industrial, and energy purchases to make from the United States, as his defense ministry has so far offered its weapons purchase plans.

“All purchases will be actively pursued,” he said.

Additionally, non-tariff barriers are a signal for the United States to evaluate the fairness of trade, and Taiwan will proactively settle non-tariff barriers that have endured for multiple years to smooth trade negotiations with the United States, Lai added.

Despite a lack of formal diplomatic ties, the United States is Taiwan’s most critical international supporter and its main source of arms.

Meanwhile, China continues to pressure Taiwan both militarily and politically, viewing the democratically governed island as a Chinese territory, amid objections from the government in Taipei.

Not long before Trump’s tariff rollout, China announced an end to its latest series of war games around Taiwan.

Taiwan has endured major global changes before and survived, Lai said.

“Not only have we been able to overcome the difficulties, but we have also been able to turn crises into opportunities, transforming the Taiwanese economy into a new and more resilient one,” he added.

Temporary Curbs on Short-Selling

On April 6, Taiwan’s Financial Supervisory Commission said it will impose temporary curbs on short-selling of shares to address potential market turmoil following Trump’s import tariffs, including any other steps as needed, the financial regulator said in a statement.

The commission said it would limit the number of shares that can be sold short while raising the minimum short-selling margin ratio to 130 percent from 90 percent, beginning on April 7 and ending on April 11.

Short sellers borrow shares they anticipate to drop, sell them, and buy them and return them later, recouping the difference.

Taiwan’s stock market was closed for a holiday on April 3 and 4 and will reopen on April 7, which means investors have not had a chance to respond to the new tariffs. Global stock markets dropped since Trump’s rollout, with $5 trillion lost from the S&P 500 in two days.

Taiwan’s Financial Supervisory Commission said the U.S. tariffs were “bound to create a number of major uncertainties for the stability of Taiwan’s capital market.”

As it monitors international financial developments and the domestic capital market, the commission will adjust the measures “in a timely manner,” it added, without further elaboration.

“The new regulations have been introduced to make it clear that speculative short selling is not welcome,” Kao Ching-ping, deputy head of the commission’s Securities and Futures Bureau, told Reuters.

Traders said the Taiwan dollar may face significant pressure against the U.S. dollar on April 7, as the domestic stock market is expected to fall amid an outflow of foreign capital.

The Taiwan dollar has dropped roughly 0.9 percent against the greenback so far in 2025, with the benchmark stock index down 7.5 percent in the same period.

Reuters contributed to this report.
Jacob Burg
Jacob Burg
Author
Jacob Burg reports on national politics, aerospace, and aviation for The Epoch Times. He previously covered sports, regional politics, and breaking news for the Sarasota Herald Tribune.