Taipei: Taiwan's machinery, automotive parts, and electrical manufacturers have voiced optimism following the announcement of a new Taiwan-United States trade deal that reduces tariffs on Taiwanese goods.
According to Focus Taiwan, the agreement stipulates that the United States will lower tariffs on Taiwanese products from 20 percent to 15 percent without adding them to existing most-favored-nation rates, as confirmed by Taiwan's Executive Yuan. Additionally, duties on Taiwanese auto parts under Section 232 of the U.S. Trade Expansion Act will be capped at 15 percent, as stated in a U.S. Department of Commerce news release.
Automotive parts manufacturers have acknowledged that the revised rates will enhance the competitiveness of Taiwanese exports, aligning them with major rivals such as Japan, South Korea, and the European Union. Notably, auto parts manufacturer Tong Yang Industry Co. and drivetrain parts maker Hota Industrial Mfg. Co. highlighted that the U.S. market constitutes about 50 percent and 60 percent of their revenues, respectively, making the tariff reduction particularly advantageous.
Tong Yang Industry also noted that since May 2025, most Taiwanese auto parts exports were subjected to a total tariff of 27.5 percent, comprising a 25 percent Section 232 surcharge in addition to the existing 2.5 percent duty. This was in contrast to the 15 percent rate applied to competitors from Japan, South Korea, and the EU.
Similarly, the electrical device manufacturing sector has expressed optimism, with Teco Electric and Machinery Co. indicating that the policy will bolster its exports of motors and related components to the United States. Teco further mentioned that its Teco-Westinghouse Motor Co. operations in the U.S. would benefit from reduced production costs, as some products depend on components manufactured in Taiwan.
Conversely, leaders in Taiwan's machine tool sector have offered a more cautious perspective, acknowledging that the tariff cuts would help level the playing field but emphasizing that exchange rate fluctuations remain a critical factor affecting export competitiveness. The Taiwan Association of Machinery Industry has previously noted that the strength of the Taiwan dollar against currencies like the Japanese yen and South Korean won continues to impact the sector's export performance.
Industry representatives also highlighted intensified competition from low-priced Chinese exports as an ongoing challenge for Taiwan's machine tool manufacturers. Yen Jui-hsiung, chairman of Tongtai Machine and Tool Co., stated that as tariff conditions become more aligned, competition will increasingly hinge on technology, manufacturing capability, and service value.