TAIPEI (Taiwan News) — The Chung-Hua Institution for Economic Research warned Sunday that Taiwan could face additional US tariffs under Section 301 due to its growing trade surplus with the US, urging the government to craft a new tariff strategy, per UDN.
The caution follows a recent ruling by the US Supreme Court striking down tariffs imposed by President Trump under the International Emergency Economic Powers Act.
CIER President Lien Hsien-ming (連賢明) said Taiwan should act quickly to preserve its Section 232 most-favored-nation status for goods tied to national security. He also warned Taiwan’s trade imbalance with the US could make it vulnerable to a Section 301 investigation into alleged unfair trade practices.
Lien said the current Taiwan-US trade framework consists of two components. The first is an Agreement on Reciprocal Trade, which includes market access and expanded procurement commitments in exchange for a 15% non-cumulative tariff. The second is a Memorandum of Understanding, under which Taiwan pledged US$250 billion (NT$7.88 trillion) in private investment in the US and US$250 billion in Taiwan government guarantees in exchange for Section 232 MFN treatment and bilateral investment cooperation.
He said the Supreme Court ruling affects only the ART and not the MOU. Regarding the ART, Lien recommended a wait-and-see approach, saying Trump is likely to revise the agreement.
The most favorable outcome, he said, would be for Trump to lower the existing 15% tariff and for Taiwan to sign a revised agreement. However, he considered this unlikely, predicting instead that the US would amend relevant laws while maintaining the current tariff structure.
The worst-case scenario would be for Taiwan to reopen negotiations or refuse to sign the ART following the court ruling. Lien warned that Trump could readily invoke Section 301, given Taiwan’s substantial trade surplus with the US.
Fubon Financial Holding Chief Economist Luo Wei (羅瑋) said newly implemented Section 122 tariffs of 15% could benefit China, India, and ASEAN countries whose previous tariff rates exceeded 15%. He said the new measures could disrupt global trade, prompting Japan, South Korea, and Taiwan to reassess their strategies.
Li Chen-yu (李鎮宇), chief economist at TS Financial Holding, said goods not covered under Section 232 would be subject to the MFN tariff rate plus the short-term Section 122 tariff. He noted that Taiwanese traditional industries previously leveraged the 15% tariff cap to gain an edge over Southeast Asian competitors, but that advantage has narrowed under the revised system.
Cathay United Bank Chief Economist Lin Chi-chao (林啟超) said countries should remain cautious about a potential Section 301 probe. He said Japan and South Korea continue trade negotiations and investment talks in the US, partly out of concern over further tariff actions.
Sean Scanlan
Taiwan News, Staff Writer
Feb. 23, 2026