U.S. and Taiwan Finalize Reciprocal Trade Agreement, Capping Tariffs and Expanding Market Access

Historic Trade Pact Signed

The United States and Taiwan officially finalized a landmark reciprocal trade agreement on Thursday, February 13, 2026, marking a significant step in strengthening economic ties between the two partners. The agreement, formally known as the Agreement on Reciprocal Trade, was signed under the auspices of the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office in the United States (TECRO). U.S. Trade Representative Jamieson Greer and U.S. Commerce Secretary Howard Lutnick were among the key officials involved in the finalization of the pact.

Tariff Reductions and Market Access

Under the terms of the agreement, the United States has committed to applying a tariff rate on originating goods from Taiwan that will be the higher of either the U.S. Most Favored Nation (MFN) tariff rate or a 15 percent tariff rate. This effectively caps U.S. tariffs on Taiwanese goods at 15 percent, a reduction from an earlier 20 percent imposed by the Trump administration. Additionally, 2,072 items, representing nearly 20 percent of Taiwan's total exports to the U.S., will be exempt from additional tariffs and subject only to standard MFN rates. This is projected to lower the average U.S. tariffs on Taiwanese goods to 12.33 percent.

In return, Taiwan has pledged to eliminate or reduce 99 percent of its tariff barriers on U.S. industrial and agricultural exports. This includes a wide range of products such as:

• Industrial Goods: Autos and auto parts, chemicals, seafood, machinery, health products, electrical products, metals, and minerals.
• Agricultural Goods: Horticultural products, wheat, beef and beef products, dairy products, pork and pork products, and lamb.

Addressing Non-Tariff Barriers and Investment Commitments

Beyond tariffs, the agreement also tackles long-standing non-tariff barriers. Taiwan has committed to:

• Removing quantitative restrictions on U.S. motor vehicles and accepting those built to U.S. Federal Motor Vehicle Safety Standards without additional requirements.
• Accepting U.S. FDA marketing authorizations for medical devices and pharmaceuticals manufactured in the United States.
• Resolving and preventing non-tariff barriers for U.S. agricultural exports, including beef, pork, poultry, processing potatoes, and working to allow bison meat into Taiwan.

Furthermore, Taiwan has made substantial commitments to purchase U.S. goods between 2025 and 2029, totaling over $84 billion. These purchases include:

• $44.4 billion in liquefied natural gas and crude oil.
• $15.2 billion in civil aircraft and engines.
• $25.2 billion in power grid equipment, generators, marine equipment, and steel-making equipment.

Taiwanese companies have also pledged at least $250 billion in U.S. production investments, supported by government credit guarantees.

Significance and Future Outlook

The agreement is expected to significantly enhance the economic relationship between the U.S. and Taiwan, fostering increased bilateral investment, commercial opportunities, and strengthening supply chain resilience, particularly in high-technology sectors. Taiwanese leader Lai Ching-te described the pact as 'a pivotal moment' for Taiwan's economy and industries. The deal still requires approval from Taiwan's parliament to fully enter into force.