Taiwan not expected to benefit from US content rule for tariff exemption

台灣預計不會受惠於美國內容規則的關稅豁免

20% US content rule does not apply to technology


TAIPEI (Taiwan News) — Taiwan is not expected to benefit from the US content rule for tariff exemptions, the Cabinet said.

US President Donald Trump announced a 32% tariff on Taiwanese goods starting Wednesday. The Cabinet has condemned Trump's tariff as unreasonable, noting Taiwan’s export growth and trade surplus with the US have been driven by America's strong demand for semiconductors and AI-related products, per CNA.

There are some exceptions to the tariffs, including the “US content rule,” which stipulates that if a good has at least 20% US-originating content, then the tariff rates apply only to the good’s non-US content, per CSIS. For example, a product with 40% US components would receive a tariff only on the remaining 60%.

The Office of Trade Negotiations confirmed the content rule does not apply to technology. It added that only a few Taiwanese companies buy components from US suppliers and use them in products resold to the American market.

Therefore, Taiwanese technology exporters, who were hoping to find exceptions, will not be able to claim that components in their products made with US technology should be tariff-exempt. Taiwan's exports to the US primarily comprised steel products, automated data processing equipment, and computer components and parts.

For Taiwanese hardware manufacturers, these exporters need to prove that the components in their products originate from the US. However, the trade office said that US Customs and Border Protection still has to decide how the US content is calculated.

In addition, Taiwan's top trade negotiator Yang Jen-ni (楊珍妮) said that even if 20% of the good is US-origin, 80% of the product’s value abroad will still be subject to import duties. For instance, Yang said that a product made in Taiwan with a US$100 value and US$20 worth of US components will still be taxed on a US$80 value.