The United States and Taiwan have finalised a trade and investment agreement. The deal caps certain US Section 232 tariffs on selected Taiwanese imports at 15%. It covers auto parts, wood products and some aircraft components. The revised measures apply retroactively from May 1.
What Are the New US Tariff Rules?
The agreement follows a trade framework that both sides reached in January. However, the latest deal focuses on Section 232 tariffs. These measures cover selected products from Taiwan.
The earlier framework also included plans for zero reciprocal tariffs on certain generic medicines, pharmaceutical ingredients and natural resources that the US cannot source domestically. The May 28 agreement does not cover those items.
How the Tariffs Affect Auto Parts
The 15% cap applies to covered auto parts for passenger vehicles and light trucks.
The new rules depend on the existing tariff rate. If an import already faces a tariff of 15% or more, the US will not add further Section 232 duties. If the existing rate falls below 15%, the US will add a surcharge to reach the 15% threshold.
This approach sets a limit on the covered Section 232 duties. It does not mean that every Taiwanese auto part will face the same total tariff.
Tariffs on Wood and Timber Products
The agreement also covers selected timber, lumber and related wood products from Taiwan.
For these products, the 15% tariff acts as a minimum rate. Importers must pay at least this rate even when a free trade agreement or preferential trade programme would otherwise offer lower or zero duties.
Other trade measures may also apply. These include existing antidumping and countervailing duties. Importers should therefore check the full duties that apply to each product.
Changes for Certain Aircraft Components
The agreement removes additional Section 232 tariffs on steel, aluminium and copper for certain non-military aircraft components from Taiwan.
The affected products include equipment used in aircraft manufacturing. Examples include hydraulic systems, compressors, heat exchangers, transformers and electrical equipment.
Importers should check whether their products meet the conditions for this treatment. The change applies to certain aircraft components, not all aircraft-related goods.
Taiwan’s Investment Commitments
The agreement also includes investment commitments from Taiwan. These cover key sectors such as semiconductors, artificial intelligence, defence technology, telecommunications and biotechnology.
Taiwanese semiconductor and technology companies are expected to invest US$250 billion in the United States. The planned investments focus on advanced semiconductor manufacturing, energy projects and AI-related production.
What Importers Should Know
The new agreement changes how the United States applies certain tariffs to selected Taiwanese products. However, the rules differ by product type and existing duty rate.
Importers should confirm the correct product classification and check all applicable duties before shipping. They should also review the latest official guidance to understand how the changes affect their goods.
For help with shipping arrangements and customs documentation, contact GE Lines to discuss your logistics requirements.
