The Blubber

Taiwanese President Lai Ching-te on Sunday proposed a “zero tariff” framework as a starting point for trade discussions with the United States, pledging to eliminate trade barriers rather than respond with retaliatory tariffs. He also reaffirmed that Taiwanese businesses would continue expanding their investments in the U.S.

This comes in response to President Donald Trump’s announcement last Wednesday of sweeping new tariffs on imports, including a 32% duty on Taiwanese goods—part of a broader strategy targeting dozens of U.S. trading partners. Taiwan, which maintains a significant trade surplus with the U.S., was among the countries hit hardest. Notably, the new tariffs do not apply to semiconductors, one of Taiwan’s key exports.

In a video message released by his office after meeting with small and mid-sized business leaders at his residence, Lai acknowledged the potential economic strain Taiwan faces due to the new tariffs, but expressed optimism that the damage could be mitigated.

“Negotiations on tariffs could begin with a ‘zero tariff’ arrangement between Taiwan and the United States, modeled after the U.S.-Mexico-Canada Agreement,” Lai said.

He emphasized that Taiwan would not pursue retaliatory tariffs and affirmed that Taiwanese companies would maintain and even expand their U.S. investments, provided those moves align with Taiwan’s national interest.

Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading contract chip producer, recently pledged an additional $100 billion investment in its U.S. operations. Lai noted this as a signal of continued strong economic ties.

“In the future, beyond TSMC’s increased investment, other sectors—like electronics, ICT, petrochemicals, and natural gas—will also scale up their presence in the United States, deepening Taiwan-U.S. industrial cooperation,” he said.

Taiwan’s cabinet is currently reviewing major potential purchases in agriculture, industry, and energy from the U.S., while the defense ministry has already submitted plans for additional weapons acquisitions.