Taiwan's Strategic Response: No Retaliation to US Tariffs, Focus on Negotiation and Resilience

President Lai Ching-te Outlines Strategy to Navigate New US Trade Measures, Prioritizing Dialogue and Economic Adaptation.

Taipei, April 6 – In a move to reassure the public and chart a course through potential economic challenges, President Lai Ching-te (賴清德) announced on Sunday that Taiwan will not retaliate against the recent 32 percent tariffs imposed by the United States on Taiwanese goods. The decision reflects a strategic approach focused on negotiation and reinforcing Taiwan's economic strengths.

Addressing the nation in a video, Lai acknowledged the "significant impact" of the tariffs but underscored Taiwan's robust economic fundamentals. He highlighted that while the U.S. accounted for 23.4 percent of Taiwan's exports in 2024, over 75 percent were directed to other markets. Notably, competitive ICT products and electronic components comprised 65.4 percent of exports to the U.S., demonstrating the economy's resilience.

"Taiwan has no plans to take retaliatory tariff action," Lai stated, emphasizing that investments by Taiwanese companies in the U.S. would continue without alterations, provided they align with national interests.

To mitigate the impact of the tariffs, the government, under the leadership of Vice Premier Cheng Li-chiun (鄭麗君), has assembled a negotiation team to engage in formal talks with the United States. The goal, as Lai indicated, is to aim for "zero tariffs," drawing inspiration from the USMCA (United States-Mexico-Canada Agreement).

The government also intends to increase purchases of American goods, including agricultural, industrial, petroleum and natural gas products, and defense equipment, to reduce the trade deficit. Furthermore, Lai's administration will support Taiwanese companies in expanding their investments in the U.S., focusing on sectors such as electronics, ICT, petrochemicals, and natural gas.

The strategy also includes efforts to eliminate long-standing non-tariff barriers and address U.S. concerns regarding export controls on high-tech products and the illegal relabeling of low-cost goods.

Domestically, the government plans to support industries most affected by the tariffs, particularly traditional and small and medium-sized enterprises (SMEs), and to accelerate industrial transformation. The plan is to leverage Taiwan's strengths in semiconductors and smart manufacturing to position the country as a leader in artificial intelligence applications.

The announcement followed Lai's meetings with representatives from traditional industries and SMEs. In response to Lai's address, Eric Chu (朱立倫), chairman of the Kuomintang (KMT), questioned the government's assessment of the situation and its call for increased investments in the U.S.

Chu pointed out TSMC's commitment to a US$100 billion investment in the U.S. and warned of the risk of losing Taiwan's "silicon shield." The KMT also criticized the ruling Democratic Progressive Party (DPP) for what they perceived as a slow response to the tariffs. KMT Taoyuan City Councilor Ling Tao (凌濤) stated that the government's NT$88 billion (US$2.65 billion) proposal was insufficient and proposed a special envoy to negotiate with the U.S., potentially using TSMC's investment as a bargaining chip.