Commerce Reduces Reciprocal and Section 232 Tariffs for Certain Taiwan Products

The U.S. Department of Commerce announced on January 15th a significant trade development affecting imports from Taiwan, introducing reduced tariff exposure for a wide range of products while strengthening U.S.–Taiwan economic cooperation. The agreement is designed to expand market access for U.S. companies and encourage continued Taiwanese investment in U.S. manufacturing—particularly in strategically important industries.

Overview of the Agreement

Under the newly announced framework, the United States has agreed to cap both reciprocal tariffs and Section 232 duties on certain Taiwanese-origin goods at no more than 15%. In addition, select product categories will benefit from zero-percent reciprocal tariffs, providing meaningful cost relief for importers and manufacturers operating within regulated and technology-driven supply chains.

This agreement supports U.S. companies operating in the semiconductor, artificial intelligence, defense technology, telecommunications, and biotechnology sectors, while reinforcing supply chain resilience and domestic investment.

Key Tariff Changes

The Commerce Department outlined the following tariff adjustments:

Reciprocal Tariffs

  • Reciprocal tariffs on covered Taiwanese goods will total no more than 15%

  • 0% reciprocal tariffs will apply to:

    • Generic pharmaceuticals and their generic ingredients

    • Aircraft components

    • Certain natural resources that are unavailable domestically

Section 232 Duties

  • Section 232 duties on Taiwanese auto parts, timber, lumber, and wood derivative products will be capped at 15%

  • Future Section 232 actions on Taiwanese semiconductors will be structured to reward investment in U.S. production capacity

Incentives for Semiconductor Manufacturing Investment

A key component of the announcement focuses on semiconductor manufacturing and U.S. capacity expansion. The Commerce Department emphasized that Taiwanese semiconductor manufacturers investing in the United States will receive preferential treatment under Section 232.

According to the announcement:

  • Companies constructing new semiconductor facilities in the U.S. may import up to 2.5 times their planned U.S. production capacity without paying Section 232 duties during the approved construction period

  • Imports exceeding that threshold may still qualify for a lower preferential Section 232 rate

  • After completion of new U.S. production projects, companies may continue to import up to 1.5 times their new U.S. production capacity without Section 232 duties

These measures are intended to incentivize long-term domestic manufacturing while maintaining supply chain flexibility during build-out and ramp-up phases.

What Importers Should Consider

While the announcement provides welcome relief and clarity for many importers, implementation details will be critical. Importers should closely monitor:

  • Product eligibility and correct HTS classification

  • Entry timing and tariff application dates

  • Potential quota thresholds tied to production capacity

  • Upcoming guidance from U.S. Customs and Border Protection (CBP)

How Radius International Can Help

Radius International is actively tracking developments related to this announcement and forthcoming CBP guidance. Our team is available to assist importers with:

  • Evaluating tariff exposure and eligibility under the new framework

  • Reviewing classifications and entry filings

  • Advising on compliance strategies related to Section 232 programs

  • Monitoring regulatory updates as implementation guidance is released

As trade policy continues to evolve, proactive planning and accurate compliance remain essential.

For questions about how this announcement may impact your imports, please contact Radius International.