Taiwan courts Trump amidst tariff reprieve

When US President Donald Trump stated that he would impose a 32% “reciprocal” tariff on Taiwanese exports, Taiwan’s leader, Lai Ching-te, responded cautiously. With Trump’s decision to delay, a critical 90 days awaits the Lai administration.

Since Trump’s return to the White House in January, Taiwan has made significant efforts to gain favor with Trump and maintain unofficial relations. The largest chip manufacturer, Taiwan Semiconductor Manufacturing Co. (TSMC), has pledged a $100 billion investment in the US, a move supported by Lai. Last month, Taiwan hosted Alaska’s Republican Governor, Mike Dunleavy, a Trump ally, and planned to import liquefied natural gas from the state. The Lai administration has also aligned with US calls for increased defense spending, promising to raise it to 3% of gross domestic product (GDP).

Trump still included Taiwan on his tariff target list. However, his abrupt decision to halt tariffs, except for a 10% baseline rate for everyone, may have opened a “bargaining” window for Taiwan to persuade Trump.

“Now that we have another 90 days, we can discuss Taiwan-US economic and trade cooperation in more detail and depth,” Taiwan’s Foreign Minister, Lin Chia-lung, told reporters on Thursday.

Lin praised the potential collaboration, stating, “We hope to create a joint fleet approach by leveraging the US’s enormous market, excellent technology capital, and talent in a Taiwan-US coalition.”

According to local media, Lai said on Friday that Taiwan was among the “first” on the list for discussions with the Trump administration.

Expressing confidence in Taiwan’s economy in a special broadcast last week, Lai emphasized strengthening industrial cooperation with the US and upgrading Taiwanese industries in global supply chains.

“Taiwan has no plans to adopt retaliatory tariffs to address the US’s reciprocal tariffs. There will be no changes to corporate investment commitments to the US as long as they are consistent with national interests,” Lai stated.

He added, “At the same time, we must ensure that the US clearly understands Taiwan’s contributions to US economic development.”

In an op-ed published by Bloomberg this week, Lai detailed his planned approach. He stated that his administration is willing to reduce its tariffs to zero “on a reciprocal basis with the US.” He also pledged to expand purchases of American goods, continue additional arms purchases, continue making new investments “across the US,” and remove non-tariff barriers while addressing US concerns about export controls and improper transshipment through Taiwan.

“Lai’s approach to foreign relations is cautious and focused primarily on US relations, and secondarily on Japan,” said Rupert Hammond-Chambers, President of the US-Taiwan Business Council.

Hammond-Chambers noted that the sentiment of “deterring China” brings with it the understanding that strong relations with America “must be maintained at all costs.”

In a speech in February, Lai emphasized shared values and expressed gratitude for Trump’s support. Lai pledged to continue reforming and improving defense to encompass “the entire society” and to prioritize special budget allocations to ensure defense spending exceeds 3% of GDP.

The US government has supported Lai’s security reforms, with the de facto American Ambassador, Raymond Greene, openly expressing this support.

TSMC’s $100 billion investment marks the latest in a wave of companies committing large sums to the US: Taiwan and the US are preparing to sign a long-awaited agreement to end double taxation, which will smooth the path.

Hammond-Chambers said that Lai’s approach has so far been well-received among Republican legislators and Trump administration officials.