Chinese President Xi Jinping is expected to visit the United States, where the artificial intelligence race and technology industry strategies are likely to feature prominently. As U.S. domestic politics increasingly intersect with trade policy, the future of Taiwan-U.S. economic and trade relations is also drawing attention. Hsien-Ming Lien, President of the Chung-Hua Institution for Economic Research (CIER), said the United States could again ask Taiwan to increase investment in semiconductors and other sectors in response to domestic political and electoral considerations. Taiwan should develop contingency strategies early.
Taiwan’s U.S. Trade Surplus Surpasses US$140 Billion, Necessitating Early Preparations for Potential U.S. Demands
Lien observed that recent U.S. trade policy has shifted toward prioritizing domestic interests, and Taiwan’s expanding trade surplus with the United States may draw increased scrutiny. In the first eight months of 2026, Taiwan’s trade surplus with the United States exceeded US$140 billion, marking a record high for the period. Should the United States further associate trade imbalances with industrial investment, semiconductor investment is likely to reemerge as a central issue in bilateral negotiations.
The rapid growth of Taiwan’s trade surplus with the United States reflects, in part, the restructuring of global semiconductor supply chains and evolving specialization among major Asian economies such as Taiwan and South Korea. This phenomenon should not be interpreted solely as a traditional trade imbalance. In addressing U.S. demands, the government should articulate the complexities of industrial specialization and supply chain structures, and reference Taiwan’s existing investment commitments in the United States as a foundation for negotiations.
Lien further noted that Taiwan has already made significant investments in the United States, with TSMC-related investment plans amounting to US$265 billion. In contrast, while South Korea has announced large-scale U.S. investment proposals, several details remain unconfirmed. In future negotiations with the United States, Taiwan should evaluate not only prospective requests for additional investment but also its current investments, supply chain presence, and overall contributions to the U.S. economy.
Addressing concerns about a potential renegotiation of the Taiwan-U.S. trade agreement, Lien stated that there is currently no justification to presume the bilateral economic and trade framework will be entirely reopened. Nevertheless, given the volatility of U.S. trade policy, the government should prepare for multiple scenarios in advance, rather than responding reactively to new U.S. demands.
Post-ART Challenges Highlight the Importance of Administrative Procedures in Taiwan-U.S. Economic Cooperation
Yu-Shung Wang, Assistant Executive Director of the Center for International Trade Policy at the CIER, noted that Taiwan’s trade surplus with the United States continues to expand, reaching approximately US$140 billion in 2025. Preventing this increasing surplus from undermining the trade framework established by the Taiwan-U.S. Agreement on Reciprocal Trade (ART) represents a significant challenge.
Wang indicated that, following the signing of the ART, the primary challenges have shifted toward administrative procedures and implementation. Specifically, judicial examination of the legal basis for U.S. tariff measures may subject future tariff policies and their enforcement to more stringent legal review.
Under the ART framework, Taiwan and the United States are required to issue detailed implementing rules for export controls, investment regulations, and related matters. Coordination of specific application and enforcement procedures is also necessary. However, discrepancies persist in certain areas of implementation, and companies continue to face challenges with application processes and compliance requirements.
Wang recommended that the government maintain coordination with the United States through bilateral channels. Additionally, mechanisms such as the International Trade Administration and the Taiwan External Trade Development Council could be utilized to collect feedback on implementation challenges from businesses and integrate these concerns into bilateral negotiations. Enhancing administrative procedures and regulatory harmonization would reduce transaction costs and improve operational efficiency for companies. Furthermore, effective use of tariffs, export controls, and other policy tools could guide supply chains toward greater resilience and alignment with the security interests of both Taiwan and the United States.
Lien emphasized that the next stage of Taiwan-U.S. economic and trade relations should prioritize not only tariff rates but also the implementation of agreements, export controls, and investment regulations. Considering the potential interplay between U.S. trade policy and domestic political factors, Taiwan should proactively develop multiple scenarios and negotiation strategies based on its current investments and position within industrial supply chains. Such preparation would contribute to maintaining the stability of the Taiwan-U.S. economic and trade framework.
Source: Economic Daily News (September 22, 2026). Taiwan’s U.S. Trade Surplus Exceeds US$140 Billion; CIER Warns Taiwan Could Face Scrutiny after Trump-Xi Meeting. Economic Daily News. https://money.udn.com/money/story/124480/9771176