Taipei: Taiwan is aiming to maintain the advantageous terms of a trade agreement with the United States following a shift in U.S. tariff policy, Premier Cho Jung-tai announced. A seven-hour meeting on February 21 concluded that the U.S. Supreme Court’s recent decision invalidating tariffs imposed under the International Emergency Economic Powers Act (IEEPA) could impact the agreement signed on February 12.

According to Focus Taiwan, Premier Cho highlighted the significance of the Taiwan-U.S. investment memorandum of understanding (MOU) and the most-favored treatment for high-tech goods under Section 232 of the U.S. Trade Expansion Act. Cho emphasized that these terms, which are part of the bilateral agreement, are crucial for Taiwan and necessitate immediate confirmation with the U.S. to understand any legal procedures and potential actions required.

The United States had initially imposed a 20 percent import duty on Taiwanese goods on July 31, 2025, under President Donald Trump’s “reciprocal” tariffs using IEEPA authority. Subsequent negotiations led to a reduction of the tariff to 15 percent, aligning it with the tariffs imposed on Japan and South Korea. The agreement also secured most-favored treatment for Taiwan’s high-tech goods under Section 232, in exchange for Taiwan’s commitment to invest US$250 billion in the U.S. and reduce barriers to U.S. products.

Despite the pending Supreme Court decision, the trade deal was signed but awaits ratification by Taiwan’s Legislative Yuan. The Supreme Court ruled on February 20 that the IEEPA does not permit the president to impose tariffs, prompting Trump to invoke Section 122 of the Trade Act of 1974 to impose a 15 percent global tariff, with potential use of Sections 301 and 232.

Roy Chun Lee, associate research fellow at Taiwan’s Chung-Hua Institution for Economic Research, noted that the ruling has increased uncertainty in U.S. trade policy. With Trump’s objectives of cutting trade deficits and attracting investment unchanged, Washington may explore alternative legal avenues. Lee pointed out that Sections 122, 301, and 232 have limitations, including time restrictions and investigative requirements, possibly leading to sequential tariffs and increased uncertainty.

The Taiwan-U.S. agreement, signed before the court ruling, offers Taiwan a strategic advantage, described by Lee as a “fast-track entry card.” While the Section 232 component remains unaffected by the ruling, the reciprocal tariff arrangement faces uncertainty after the previous duties were invalidated.