In the face of sweeping new U.S. tariffs targeting a broad range of trading partners, Taiwan’s President Lai Ching-te has proposed a bold new direction for bilateral trade. In a video statement released Sunday, Lai extended an olive branch to Washington by offering “zero tariffs” as a starting point for future negotiations, inspired by the model of the U.S.-Canada-Mexico free trade agreement (USMCA).
Speaking after a meeting with business leaders at his official residence, Lai emphasized that Taiwan would not engage in retaliatory tariffs despite the economic pressure. Instead, he said, Taiwan would dismantle long-standing non-tariff trade barriers and uphold its commitment to strengthening economic ties with the U.S.
A New Trade Framework Without Retaliation
President Donald Trump’s announcement of across-the-board import tariffs earlier in the week sent ripples through the global trading system. Taiwan, with its significant trade surplus with the United States, now faces a steep 32% tariff on its exports. However, one of its key industries—semiconductors—remains exempt from the new duties, offering a silver lining amid the growing economic uncertainty.
Lai acknowledged that Taiwan’s trade-reliant economy would feel the pinch, but expressed confidence in its ability to adapt. "Given our dependence on trade, the economy will face challenges, but the impact can be minimized," he said.
Lai also underscored that Taiwan has no plans to respond with punitive measures. “As long as U.S. investments remain in Taiwan’s interest, Taiwanese companies will continue their commitments abroad,” he affirmed.
Expanding U.S. Investment and Industrial Cooperation
Highlighting Taiwan's ongoing investment in the U.S., Lai referenced chipmaking giant TSMC’s recent $100 billion expansion announcement. He also noted that several other sectors—including electronics, petrochemicals, ICT, and energy—are expected to increase their presence in the American market.
“In the future, in addition to TSMC’s increased investment, other industries will deepen cooperation with U.S. partners, building a resilient industrial alliance,” he said.
Lai also revealed that Taiwan’s cabinet is actively planning significant purchases of agricultural, industrial, and energy products from the U.S., while the defense ministry has advanced its weapons procurement agenda. “All purchases will be actively pursued,” he declared, positioning Taiwan as a reliable economic and strategic partner.
Tackling Trade Barriers for Smoother Relations
The President noted that the U.S. evaluates fairness in trade not just through tariffs but also via non-tariff barriers. Taiwan, he said, will address and eliminate long-standing barriers to improve transparency and fairness in bilateral trade relations.
“The removal of non-tariff trade obstacles will pave the way for smoother negotiations,” Lai added, aiming to reassure Washington of Taiwan’s commitment to fair trade practices.
A Strategic Ally Under Pressure
The economic overtures come amid increasing military and political pressure from China, which continues to assert claims over the self-governed island. Taiwan, lacking formal diplomatic ties with the U.S., nevertheless relies heavily on American military support and global advocacy.
China recently concluded yet another round of war games surrounding Taiwan, further raising regional tensions. In response, Lai framed the latest challenges as opportunities for transformation.
“Taiwan has weathered global crises before. Not only have we overcome them, but we’ve turned them into opportunities to reshape our economy into a stronger, more resilient force,” he said.
As Taiwan seeks to navigate a volatile global environment, President Lai’s message is clear: collaboration, not confrontation, will define the island’s economic future.