On February 12, 2026, the United States and Taiwan signed an Agreement on Reciprocal Trade (“ART”) formalizing the Memorandum of Understanding (“MOU”) signed on January 15, 2026.
As part of the deal, the IEEPA reciprocal tariff rate for Taiwan will be reduced from 20 percent to 15 percent inclusive of the most favored nation rate (“MFN”). In effect, goods with an MFN rate of below 15 percent will be subject to a total tariff rate of 15 percent. While goods with an MFN rate of 15 percent or more will be subject to an all inclusive tariff rate of 15 percent. Although the ART makes no reference to Section 232 tariffs, the Factsheet issued by the Office of the U.S. Trade Representative indicates that the United States will provide preferential treatment to Taiwan with respect to Section 232 duties on semiconductors, as well as in other Section 232 investigations. A Fact Sheet issued by the U.S. Department of Commerce on January 15, 2026 indicated that the Section 232 duties applied to Taiwanese auto parts, timber, lumber, and wood derivative products will total no more than 15 percent. This issue will likely be clarified during implementation of the Agreement.
Taiwan is expected to eliminate or reduce 99 percent of tariff barriers significantly improving market access to a host of U.S. goods such as autos and auto parts, chemicals, seafood, machinery, health products, electrical products, metals, and minerals, agricultural exports, including horticultural products, wheat, beef and beef products, dairy products, pork and pork products, lamb and sheep meat, tree nuts, dog and cat food, ketchup, and peanuts.
Additionally, Taiwan has committed to address a number of non-tariff barriers for autos and medical devices. Taiwan will remove quantitative restrictions and accept U.S. vehicles built to U.S. Federal Motor Vehicle Safety Standards, and emissions standards. Taiwan will also accept U.S. FDA marketing authorizations for medical devices and pharmaceuticals manufactured in the United States without additional requirements for entry into Taiwan’s market. Taiwan will also ensure transparency and fairness regarding reimbursement and listing of medical devices and pharmaceuticals under its health care system.
As with other recently signed trade deals, Taiwan has undertaken commitments in other areas such as strengthening labor rights and environmental protections including addressing illegal logging, fishing and wildlife trade. Taiwan has committed to refrain from providing non-commercial assistance or otherwise subsidizing its good-producing public enterprises addressing distortions by state-owned enterprise. With respect to intellectual property rights, Bangladesh will strengthen IP enforcement. However, with respect to geographical indication (GI) protections, the country will allow U.S. meat and cheese products to use common names.
Finally, Taiwan has made certain purchase commitments including $44.4 billion worth of liquefied natural gas and crude oil, $15.2 billion worth of civil aircraft and engines, and $25.2 billion worth of power equipment, power grids, materials, generators, storage facilities, marine equipment, steel-making equipment, and other equipment from 2025 through 2029.
The two sides will undertake domestic formalities prior to the Agreement entering into force. This will include submission of the Agreement to the Taiwanese legislature for review.
The Husch Blackwell International Trade Team continues to monitor developments and will provide updates as they are available.