President Trump’s announcement on Thursday of a new tariff rate of 20 percent on Taiwan’s exports to the United States comes when ties between Taipei and Washington are already particularly strained.
Days earlier, Taiwan’s president, Lai Ching-te, called off plans to stop in New York and Dallas during an upcoming trip to Latin America at the urging of the Trump administration. Taiwan’s leaders typically use such transit stops as a way to show its ties with the United States, invariably drawing protest from China, which claims Taiwan is part of its territory.
Now, Taiwanese officials acknowledged that weeks of talks by their negotiators in Washington had not led to a trade deal like the ones struck by Japan and South Korea. And a bigger threat still loomed, as the United States weighed the possibility of putting damaging tariffs on semiconductors, Taiwan’s main exports.
These possible tariffs on chips were part of the continuing talks between the two sides, Taiwan’s cabinet, the Executive Yuan, said in a statement on Friday.
“Both sides have expressed their commitment to continue negotiations,” the statement said.
On Friday, Taiwanese officials played down the new tariff rate, saying the two sides had simply not yet concluded the talks. Negotiators from Taiwan have spent the past two weeks in Washington trying to hammer out a deal, their fourth such visit since Mr. Trump first announced so-called reciprocal tariffs in April.
The United States has been the largest buyer of Taiwan’s exports since late last year, according to government data. But for most of the past three decades, it was China.
“The United States is of vital importance to Taiwan’s economic and trade development,” Mr. Lai said at a briefing on Friday.
Taiwan’s main exports are chips and related products. Taiwanese companies make a vast majority of the world’s advanced semiconductors, the tiny computer chips needed to power electronics from smartphones to artificial intelligence.
Semiconductors typically enter the United States as components in electronics like A.I. servers. Experts say it is difficult to put tariffs on the industry because its supply chain is so complex and specialized.
Taiwan would seek to receive preferential treatment under whatever decision is reached regarding semiconductor specific tariffs, the Executive Yuan said.
Officials and businesses in Taiwan have been trying to soften the blow of Washington’s tariff threats. In March, Taiwan expressed interest in buying natural gas from a long-stalled project in Alaska. Weeks earlier, Taiwan Semiconductor Manufacturing Company, the world’s largest chipmaker, said it would spend $100 billion in the United States to expand its operations in Arizona.
Mr. Trump praised TSMC’s investment when he announced the initial round of tariffs in April. But since then, Taiwan’s neighbors Japan and South Korea have agreed to investments that are several hundred billion dollars larger.
Analysts said this might be one of the sticking points in the continuing negotiations.
“We have not, like Japan and South Korea, committed massive investments,” said Darson Chiu, director-general of the Confederation of Asia-Pacific Chambers of Commerce and Industry.
No trade deal has been announced in part because of Washington’s time constraints, the Executive Yuan said. Taiwan had to fit its discussions into “a limited time frame, given that the U.S. was concurrently negotiating with multiple countries,” the statement said.
Mr. Trump previously said Taiwan had gained an unfair dominance in making semiconductors and had accused the country, which depends on the United States for political support against China’s claims, of spending too little on its own security.
“Negotiations always require both giving and receiving,” said Jun-ji Shih, an economist who was vice premier of Taiwan during Mr. Trump’s first term in office. “Trump’s negotiations were completely free of giving — the United States gave nothing.”
Meaghan Tobin covers business and tech stories in Asia with a focus on China and is based in Taipei.
Amy Chang Chien is a reporter and researcher for The Times in Taipei, covering Taiwan and China.
Xinyun Wu is a reporter and researcher for The Times in Taipei, covering technology, Taiwan and China.
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