By Lian Xianming, Vision Times
After more than a year of negotiations, Taiwan and Washington formally signed a Reciprocal Tariff Agreement (ART) in Washington on Feb. 13, marking what some analysts describe as Taiwan’s closest step yet toward a “quasi–free” trade framework with the U.S.
The agreement is expected to benefit Taiwan’s traditional manufacturing sectors seeking greater access to the American market, while also bolstering the island’s role in critical technology supply chains.
Major purchase commitments
Analysts note that U.S. President Donald Trump’s tariff agreements typically include three core components: Major market opening, large-scale procurement, and major investment. On the procurement side, Taiwan has committed to significantly increasing purchases of U.S. goods between 2025 and 2029, including:
$44.4 billion in liquefied natural gas and crude oil
$15.2 billion in civilian aircraft and engines
$25.2 billion in grid equipment, generators, ships, and steel manufacturing equipment
Together, these commitments total roughly $85 billion, or about $21 billion annually. Analysts thus argue that this level of procurement should not be an excessive burden for Taiwan. For example, with Boeing aircraft priced at roughly $200–$400 million each, the agreement would translate to an average of around 12 additional aircraft purchases per year.
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However, supply constraints could pose challenges, as Boeing’s backlog already extends beyond 2030, and Japan and South Korea have also pledged large aircraft purchases.
Energy security and diversification
Taiwan currently imports approximately 96 percent of its energy, spending about $50 billion annually. Increasing U.S. energy imports by $10 billion per year could raise America’s share of Taiwan’s energy supply from roughly 10–15 percent to 30–35 percent.
Beyond reducing Taiwan’s trade surplus with the U.S., economists say this would also diversify Taiwan’s energy sources and strengthen energy security.
The agreement also includes market opening measures, which are “highly sensitive” in any tariff negotiation, analysts say. The agreement can broken down into three key areas: Agriculture, industrial products, and regulatory alignment.
Agriculture
Taiwan reportedly succeeded in maintaining tariff protections on 27 sensitive agricultural products, including rice, chicken, and garlic, an outcome economists are calling “surprising,” given the difficulty Japan has faced in defending rice protections.
Taiwan also prioritized opening categories with little domestic production, such as wheat, apples, and cherries, limiting the impact on local farmers.
Importantly, Taiwan secured exemptions for 261 agricultural products, including orchids and tea, representing 42.1 percent of Taiwan’s agricultural exports to the U.S.
Industrial products
On the industrial side, Taiwan lowered tariffs on additional categories, including the highly significant removal of the 17.5 percent tariff on passenger vehicles, a long-protected sector due to employment concerns.
While this will increase competitive pressure, economists note Taiwan’s real strength lies not in assembling vehicles, but in producing auto parts and components. Under the agreement, component tariffs will fall to 15%, aligning Taiwan with Japanese and Korean competitors.
Overall, analysts estimate Taiwan’s average tariff rate on exports to the U.S. could decline to 12.32 percent due to exemptions across nearly 2,000 product categories.
Regulatory and standards alignment
Washington has long been concerned about Taiwan applying food safety standards that exceed international norms, particularly regarding U.S. beef and pork. While the U.S. reportedly pushed for full alignment, analysts note Taiwan retained several labeling and import restrictions, suggesting the negotiation team resisted sweeping changes.
The agreement also includes broader commitments related to labor standards, intellectual property protections, environmental rules, transparency, and trade facilitation — elements commonly required in high-standard frameworks such as the CPTPP.
The agreement must still be reviewed and approved by Taiwan’s legislature. Unlike the U.S., where tariff changes can be enacted through executive emergency powers, Taiwan’s democratic process requires parliamentary oversight.
This agreement represents Taiwan’s most significant progress in decades toward a high-level trade framework with a major economy, despite longstanding obstacles from Beijing. “This tariff agreement can be regarded as Taiwan signing a quasi–free trade agreement with the United States,” analysts say.
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