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On May 28, 2026, the U.S. Department of Commerce (“Commerce”) and the Office of the United States Trade Representative (“USTR”) announced reduced tariffs under Section 232 of the Trade Expansion Act of 1962, (“Section 232 tariffs”) for certain aircraft components, automobile parts and wood products from Taiwan effective May 1, 2026. The published Federal Register Notice comes as a result of the trade and security agreement between the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office in the United States (TECRO) signed earlier this year. 

This action implements U.S. commitments under a Memorandum of Understanding (MOU) signed January 15, 2026 between the countries. Under the MOU, Taiwan committed to facilitate U.S. investment in Taiwan’s semiconductor, AI, defense technology, telecommunications, and biotechnology sectors and committed to investments totaling $250 billion in U.S. advanced semiconductor, energy, and AI production. In exchange, the United States agreed to reduce Section 232 tariffs on certain auto parts, wood products and aircraft components.

The notice anticipates that Taiwanese investment in the U.S. will drive increased economic activity, especially in construction and manufacturing raising demand for U.S.-produced steel, aluminum, copper, and wood products. Further, the partnership is expected to increase access to a secure supply of U.S.-fabricated semiconductors and reduce semiconductor-related supply chain risk for the U.S. automobile industry.

Specifically, Section 232 tariffs will be limited in the following manner:

  • For certain specific automobile parts, timber, lumber, and wood derivative products Section 232 tariffs will be limited to a maximum of 15 percent;
  • For products with a U.S. Column 1 Duty Rate that is at least 15 percent, no Section 232 duty will apply;
  • For products with a Column 1 Duty Rate that is less than 15 percent, the sum of the Column 1 Duty Rate and the additional ad valorem tariff under Section 232 shall be no more than 15 percent;
  • The notice also provides that the United States will no longer apply derivative Section 232 steel, aluminum, and copper tariffs to aircraft components that are products of Taiwan.

These changes are retroactive and effective May 1, 2026.

US Customs and Border Protection (“CBP”) has issued guidance on the new and modified tariff headings for the relevant products from Taiwan.

  • Eligible wood products of Taiwan subject to 15 percent duty will be reported under HTSUS subheading 9903.76.24;
  • Parts of passenger vehicles and light trucks from Taiwan, with duty rates adjusted to 15% will be reported under subheadings 9903.94.66 to 9903.94.69;
  • Subheading 9903.96.03 related to civil aircraft components will now include the exemption for aircraft parts from Taiwan;
  • CBP also stated that importers may file a Post Summary Correction to request a duty refund following this announcement.

The Husch Blackwell International Trade and Supply Chain team will continue to monitor this and provide updates as they become available.  If you have any questions or concerns, please contact your Husch Blackwell attorney. 

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Photo of Nithya Nagarajan Nithya Nagarajan

Nithya’s extensive background in U.S. trade issues spans 25 years and includes various roles in a number of federal government agencies, including the Department of Commerce Department of Justice, and the U.S. Court of International Trade. She assists clients with administrative and regulatory…

Nithya’s extensive background in U.S. trade issues spans 25 years and includes various roles in a number of federal government agencies, including the Department of Commerce Department of Justice, and the U.S. Court of International Trade. She assists clients with administrative and regulatory actions before the Department of Commerce, International Trade Commission and U.S. Customs and Border Protection (CBP) and defends clients in appeals before the Court of International Trade, Court of Appeals for the Federal Circuit, NAFTA panels and the World Trade Organization. In addition to her body of U.S. experience, Nithya is also well-versed in international trade issues in China and India.

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Photo of Moushami Joshi Moushami Joshi

Moushami draws on an international background and career to advise clients on tariffs, customs matters, and trade remedies. She has represented foreign governments and multinational corporations in all aspects of customs and tariff related matters. She has represented clients in safeguard, antidumping, and

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Moushami draws on an international background and career to advise clients on tariffs, customs matters, and trade remedies. She has represented foreign governments and multinational corporations in all aspects of customs and tariff related matters. She has represented clients in safeguard, antidumping, and countervailing duty actions before the Department of Commerce and U.S. International Trade Commission and in appeals before the Court of International Trade and the Court of Appeals for the Federal Circuit, as well as before NAFTA and USMCA panels. Moushami regularly advises clients on tariffs and customs rules, including Section 301 and 232 tariffs and exclusion processes, customs classifications, country of origin marking requirements, prior disclosures, relief petitions, and protests. She is especially knowledgeable about Buy America and “Made in U.S.A.” rules and their implications for clients in various industries.

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