Trump's Transactional Foreign Policy Fuels 'US Scepticism' in Taiwan

There is growing unease over Washington's stance in the event of a Chinese invasion

- Yip Wai Yee

TAIPEI — Pressure is mounting for Taipei to finalize a trade agreement with Washington and lower tariff rates as soon as possible — and it is not just for economic reasons.

The fact that Taiwan has yet to secure a favorable US tariff rate for its exports — despite being one of the first and most eager economies to start talks — has raised questions about President Lai Ching-te's relationship with not only one of the island's largest trading partners, but also its most important security backer.

Mr. Lai wrote on Facebook on Aug. 1 that Taiwan is still working on an agreement with the US, saying that "the final tariff rate has not yet been determined," and that the 20 percent rate announced by US President Donald Trump on July 31 is only temporary.

"The government will strive for more favorable and reasonable tax rates for Taiwan in subsequent negotiations," he said.

Since Mr. Trump unveiled his "Liberation Day" tariffs on April 2, when he threatened to slap Taiwan with a punishing 32 percent tariff rate, Taipei officials have scrambled to appease him and reach a compromise on trade. For one thing, Taipei has pledged to significantly increase purchases of American goods, such as natural gas.

On July 31, hours before Mr. Trump's self-imposed midnight deadline, he levied a 20 percent tariff rate on Taiwan — higher than the rates directed at the island's key export competitors in the region.

Both Japan and South Korea managed to secure tariff rates of 15 percent after finalizing trade agreements with the US days before the Aug. 1 deadline.

"Taiwan's lack of a trade deal ahead of Trump's Aug. 1 deadline reflected poorly on the Lai administration," said Professor Julien Chaisse, an international trade and legal expert at City University of Hong Kong.