Taiwan–U.S. Economic Ties Strengthen Despite Headwinds; Lower Tariff and Chip Risks Support Robust 2026 Growth

Source：TPCA　Updated Time：2026/02/25

Amid dramatic shifts in geopolitics and global trade, Taiwan–U.S. relations have been warming rapidly under mechanisms such as the “21st Century Trade Initiative” and the “Taiwan–U.S. Economic Prosperity Partnership Dialogue,” even in the face of headwinds from tariffs. Strong exports of high-tech products to the U.S. in the fourth quarter of 2025 helped boost Taiwan’s annual economic growth, prompting forecasting agencies to raise their outlook for Taiwan in 2026.

According to statistics from the U.S. International Trade Commission (USITC), Taiwan’s top export products to the U.S. in recent years have consistently included computer and electronic components, machine tools and precision instruments, metal products, plastic and rubber products, and chemical products. Semiconductor-related products and equipment make up the bulk of the top two categories, while categories three through five are also closely linked to the semiconductor supply chain. U.S. exports to Taiwan remain primarily in the energy and agricultural sectors.

In 2025, global trade dynamics shifted significantly, and the artificial intelligence wave drove worldwide demand. Behind the historic record of the Taiwan Stock Exchange surpassing 30,000 points, Taiwan’s overall exports surged, with the U.S. surpassing China as Taiwan’s largest export market—a development that comes as no surprise. The Wall Street Journal reports that the U.S. trade deficit with Taiwan in 2025 reached US$150.1 billion, more than double the 2024 level. The surge in AI-related equipment demand was a major factor, a trend expected to continue this year. With tariff-related uncertainties easing, the pace of exports is expected to moderate slightly.

Taiwan and the U.S. have reached agreements on tariffs and investment, setting tariffs at 15%. Compared with other countries, Taiwan receives the most favorable treatment for Section 232 tariff items, including semiconductors and related products. Approximately 90% of the U.S. trade deficit with Taiwan comes from semiconductors, ICT products, and electronic components. As a result, the uncertainty of future U.S. tariffs has significantly decreased, reducing the risk of differential treatment versus major competitors. Moody’s Analytics notes that lower tariffs will ease challenges faced by non-tech exporters and help restore overall business sentiment.

Similar to the surge in U.S. trade volumes at the end of last year, Taiwan’s fourth-quarter 2025 growth reached a rare double-digit rate, with full-year growth exceeding analyst expectations. Strong economic fundamentals have prompted many institutions to revise their forecasts for Taiwan’s 2026 growth.

ING (International Netherlands Group) analysts note that while the general consensus had projected Taiwan’s economic growth at around 3.9% this year, the stronger-than-expected performance in the fourth quarter, driven by high-tech industries, is likely to continue for several months. Consequently, they have raised the growth forecast for 2026 to 6.8%. Data indicate that Taiwan’s export orders are climbing rapidly, and this trend is expected to persist for some time.

(Source: Economic Daily News)

Share