The U.S. Supreme Court has ruled that the president’s use of the International Emergency Economic Powers Act (IEEPA) to impose reciprocal tariffs is unconstitutional. While the decision upholds fundamental constitutional principles, it shatters the tentative stability that countries had painstakingly achieved through nearly nine months of negotiations.
Chun Lee, Associate Research Fellow of the WTO & RTA Center at the Chung-Hua Institution for Economic Research (CIER), noted that the Trump administration’s core objectives—narrowing the trade deficit via tariff adjustments and maintaining tariff revenue targets—remain unchanged. Washington is now expected to pivot to tools such as Section 122 of the Trade Act of 1974, as well as Section 301 and Section 232. This shift could result in a multi-track, overlapping tariff regime that heightens the complexity and difficulty for global companies in planning their supply chains and investment strategies.
Interplay of Sections 122, 301, and 232: Policy Gaps and Investigative Risks
The 15% tariff imposed under Section 122 is limited to a 150-day window, leading to concerns over legal stability as the administration may seek extensions or alternative statutory justifications. Meanwhile, Section 301 focuses on unfair trade practices. A new round of investigations is expected to cover drug pricing, forced labor, and market access for agricultural and fishery products—issues that have long been points of contention for the U.S. and pose latent pressure on Taiwan. Additionally, Section 232 continues to target specific products under the banner of national security. The intersecting use of these tools creates volatility regarding both the cost of trade with the U.S. and the long-term efficacy of existing agreements.
Taiwan-U.S. Agreement Holds Strategic Value: Dual-Track Execution and with Greater Transparency is Prefered
Under these circumstances, the existing U.S.-Taiwan framework becomes even more critical. First, the commitment to invest in the U.S. in exchange for preferential treatment for high-tech products under Section 232 is a tangible result that must be solidified. Second, while the Reciprocal Tariff (ART) arrangement faces adjustments due to U.S. legal shifts, it remains a vital foundation for maintaining priority dialogue with Washington.
Associate Research Fellow Chun Lee recommends that the government adopt a dual-track approach. This involves separating the investment Memorandum of Understanding (MOU) from the ART agreement in order to prioritize the ratification of finalized investment arrangements. Meanwhile, the government should establish communication channels regarding the ART agreement to build consensus among the public, opposition parties, and industry leaders, thereby demonstrating Taiwan’s commitment to its obligations. As nations compete for bilateral engagement with the U.S., the U.S.-Taiwan agreement serves as a primary asset in managing tariff variables and maintaining economic stability.
Author: CIER Editorial Team
Date: February 24, 2026