Taiwan’s trade surplus with the United States has skyrocketed too. It leaped from USD 8.4 billion in 2017 to a staggering USD 64.9 billion by 2024. This increase, over seven times Taiwan trade importance, emphasizes Taiwan’s increasing importance to the US as a trade partner. Just export-wise to the US alone, in 2024 it represented over 20% of Taiwan’s total exports. This put the US ranked third overall behind only Mainland China and Hong Kong combined, which made up 27%. Trump administration’s planned reciprocal tariffs The ire of trade retaliation will officially start on ‘Liberation Day’ on April 2. Because of Taiwan’s strategic investments in the US and essential position in tech exports, it should be spared the most severe tariff increases that would hurt its Asian competitors.
In 2024, Taiwan was marked as one of the “dirty 15” countries that have large trade imbalances with the US. This designation is timely, as Taiwan’s exports to the US in 2021 hit record levels at USD 111.4 billion, a remarkable 46.1% year-on-year growth. This includes an incredible and disproportionate jump in exports to the US over that same period. This insatiable appetite has driven Taiwan’s record trade growth over the last year. Taiwan’s technological exports are central to Taiwan’s asymmetric trade strategy. Indeed, information, communication and audio-video products make up 61% of these exports.
Taiwan’s Expanding Trade Relations with the US
Trade surplus with US has skyrocketed for Taiwan. This rising tide is emblematic of a broader paradigm shift in the nation’s balance of trade. In 2024 Taiwan was the seventh largest partner for US trade and sixth largest partner for US trade deficit. The island nation’s exports account for just under 3.6% of all US imports so far this calendar year.
Taiwan’s trade relationship with the US is heavily concentrated in technology and electronic products. Electronic components and vehicles comprise the largest share of Taiwan’s exports to the US. Combined, they comprise only 5-6% of total exports. These sectors highlight Taiwan’s strategic role in supplying essential components for America’s tech industry.
In addition to the semiconductor industry, Taiwan has made strategic investments in other sectors throughout the US. That might provide it some tug against a future tariff increase, despite it being in the “dirty 15.” The Trump administration’s reciprocal tariffs are part of a broader global trade war initiative aimed at boosting American economic dominance, particularly in artificial intelligence and related industries.
“Create hundreds of billions of dollars in economic activity and boost America’s dominance in artificial intelligence and beyond.” – Donald Trump
Potential Impacts of Reciprocal Tariffs
Yet the announcement of reciprocal tariffs by the Trump administration has caused shockwaves throughout global markets. Thousands of Asian countries are preparing for a wave of massive tariff hikes. In comparison, Taiwan will probably see much more muted increases due to its essential investments and export mix.
Taiwan’s MFN average tariff is 6.5%. In 2024 the simple average nominal tariff rate applied to all imported products is 6.34%. These impressive figures emphasize Taiwan’s competitive positioning inside international trade frameworks. Even so, as geopolitical tensions rise, it will be the speediness with which Taiwanese industries can pivot that will make all the difference.
Taiwan’s tech industry is one of the critical parts of Taiwan’s exports to the US. Our clean transportation sector is primed to be at the front of this economic transformation. As demand for information and communication technologies continues to rise, Taiwanese firms may find opportunities to mitigate potential tariff impacts through innovation and strategic partnerships within the US market.
Future Trade Prospects
Looking ahead, Taiwan’s robust trade relations with the US are expected to continue playing a vital role in its economic landscape. Closer to home, Taiwan is one of America’s most important trade partners. Armed with its technical might, it is uniquely situated to grow its market share.
The island nation has developed a strong economy centered on high-value industries such as electronics and machinery. This strategy further cements its competitive position within global supply chains. As exports lead the nation’s post-pandemic economic recovery, Taiwan is more eager than ever to deepen bilateral cooperation and seek out new trade opportunities.