U.S.–Taiwan Reciprocal Trade Agreement adjusts U.S. reciprocal tariffs on Taiwan-origin goods and preserves MFN HTS duty rates for covered items.

REGULATORY BRIEFING – U.S.–TAIWAN AGREEMENT ON RECIPROCAL TRADE

1. What changed

• The United States (via AIT/USTR) and Taiwan (via TECRO) concluded an Agreement on Reciprocal Trade.
• For U.S. imports, the key change is how the U.S. applies the "reciprocal tariff" regime created by:

– Executive Order (EO) 14257 of April 2, 2025 – Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits.

– Executive Order 14360 of November 14, 2025 – Modifying the Scope of the Reciprocal Tariffs With Respect to Certain Agricultural Products.

• The agreement establishes a U.S. tariff schedule (Schedule 2) for Taiwan-origin goods that:

– Exempts certain Taiwan-origin products (Schedule 2A) from the additional ad valorem reciprocal duty under EO 14257.

– Grants a zero reciprocal tariff rate for certain Taiwan-origin agricultural products (Schedule 2B) under EO 14360.

– Leaves the underlying MFN (column 1 – General) HTSUS duty rates unchanged for these products.

• For all other Taiwan-origin goods, the reciprocal tariff formula of EO 14257 continues to apply, with a minimum combined duty of 15% where MFN is below 15%.

2. Affected products

2.1 Scope – Taiwan-origin goods imported into the United States

• The agreement applies to "originating goods of the territory represented by TECRO" (i.e., Taiwan-origin goods meeting the agreement’s origin rules once adopted under Article 7.1).
• The detailed product coverage is in:

– Schedule 2A: Taiwan-origin goods for which the U.S. will NOT apply the additional ad valorem reciprocal duty under EO 14257.

– Schedule 2B: Taiwan-origin goods for which the U.S. will apply a reciprocal tariff rate of zero under EO 14360.

• The text provided does not reproduce the line-by-line HTS lists for Schedules 2A and 2B. Those must be obtained from the published tariff schedule PDF on USTR’s site.

2.2 Examples / categories (inferred from structure)

• Schedule 2B is explicitly tied to EO 14360, which concerns agricultural products. Expect coverage to include certain Taiwan-origin agricultural goods (e.g., specific fruits, nuts, processed foods, or other agri items) where the reciprocal tariff is set to zero.
• Schedule 2A likely covers selected industrial or other products where the U.S. has agreed not to impose the additional reciprocal duty, but still collects the MFN rate.
• All other Taiwan-origin products not listed in Schedules 2A or 2B remain subject to the general reciprocal tariff formula under EO 14257.

Because the HTS lines are not printed in the excerpt, importers must consult the official Schedule 2A and 2B tables to identify specific HTS codes.

3. Rate changes and formulas

3.1 General rule for Taiwan-origin goods (not in Schedules 2A or 2B)

Per Annex 1, Schedule 2, General Note 5:

• For an originating good of Taiwan with an MFN rate (column 1 – General) less than 15%:

– The sum of the MFN rate and the additional ad valorem reciprocal duty under EO 14257 must equal 15%.

– Example: If MFN = 5%, additional reciprocal duty = 10%, total duty = 15%.

• For an originating good of Taiwan with an MFN rate of at least 15%:

– The additional reciprocal duty under EO 14257 is 0%.

– Example: If MFN = 20%, additional reciprocal duty = 0%, total duty = 20%.

This rule continues to apply to all Taiwan-origin goods that are not specifically carved out in Schedules 2A or 2B.

3.2 Schedule 2A – Exemption from additional reciprocal duty

General Note 2:

• For Taiwan-origin goods listed in Schedule 2A:

– The U.S. will NOT apply the additional ad valorem reciprocal duty under EO 14257.

– Only the MFN (column 1 – General) HTSUS duty rate applies.

• Numeric impact:

– If MFN = 0%, total duty remains 0% (no reciprocal duty added).

– If MFN = 5%, total duty remains 5% (no top-up to 15%).

3.3 Schedule 2B – Zero reciprocal tariff rate for certain agricultural products

General Note 3:

• For Taiwan-origin goods listed in Schedule 2B:

– The U.S. provides a reciprocal tariff rate of zero under EO 14360.

– General Note 4 clarifies that the MFN rate of duty remains in effect.

• Interpretation for entry:

– The "reciprocal" component is 0%, but the MFN duty still applies.

– Example: If a Schedule 2B agricultural product has MFN = 2%, total duty = 2% (MFN) + 0% reciprocal = 2%.

– There is no additional reciprocal duty top-up to 15% for these lines.

3.4 No change to MFN HTSUS rates

• General Note 4 explicitly states that the U.S. will continue to apply the MFN rate of duty in effect for products described in paragraphs 2 and 3 (Schedules 2A and 2B).
• The agreement does not itself amend the MFN (column 1 – General) duty rates in the HTSUS; it only modifies the application of the reciprocal duty overlay for Taiwan-origin goods.

4. Dates

• Entry into force (EIF):

– Article 7.5: The agreement enters into force the day following the date of the last notification by each Party that its internal procedures are complete.

– No specific calendar date is given in the text; importers must monitor USTR/Federal Register for the actual EIF date.

• Once in force:

– The revised reciprocal tariff treatment for Taiwan-origin goods (Schedules 2A and 2B and the general 15% rule) applies from EIF forward.

• Duration and termination:

– Article 7.6: Either Party may terminate with 6 months’ written notice; upon termination, the U.S. could reimpose the prior reciprocal tariff structure.

– Article 4.3 and Article 5.4(6) also allow AIT/USTR to terminate and reimpose reciprocal tariffs if Taiwan concludes certain digital trade or FTA-type agreements with "covered nations" (10 U.S.C. § 4872).

5. Required actions for importers, brokers, and compliance teams

5.1 Determine origin and eligibility

• Confirm that goods qualify as "originating" under the agreement’s rules of origin (to be established under Article 7.1). Until specific origin rules are published, treat "originating" as Taiwan-origin in the ordinary customs sense, but be prepared for more detailed origin criteria.
• Maintain robust origin documentation from Taiwan suppliers (certificates of origin, production records) to support any claim to preferential reciprocal treatment.

5.2 Map HTS codes to Schedules 2A and 2B

• Obtain the official Schedule 2A and 2B tables from USTR (see References below).
• For each Taiwan-origin HTS line in your portfolio:

– Check if the HTS code appears in Schedule 2A.

• If yes: MFN duty only; no additional reciprocal duty under EO 14257.

– If not in 2A, check if it appears in Schedule 2B.

• If yes: MFN duty applies; reciprocal rate is zero under EO 14360.

– If in neither 2A nor 2B:

• Apply the general EO 14257 formula: total duty = max(15%, MFN), with additional reciprocal duty = 15% – MFN when MFN < 15%.

5.3 Update classification and duty calculation systems

• HTS classification:

– No structural HTSUS changes are specified, but you must ensure correct 10-digit HTSUS classification to match the Schedule 2A/2B lists.

• Duty calculation logic:

– Configure your customs/ERP systems to:

• Identify Taiwan-origin goods.
• Apply MFN duty from HTSUS column 1 – General.
• Overlay reciprocal duty logic based on:

– Presence in Schedule 2A (no reciprocal duty),

– Presence in Schedule 2B (reciprocal duty = 0), or

– Default EO 14257 formula (15% minimum total for MFN < 15%).

– Ensure that any Chapter 99 or special program indicators required to claim the modified reciprocal treatment are implemented once CBP publishes operational guidance.

5.4 Review contracts and landed cost models

• For Taiwan-origin imports currently subject to reciprocal tariffs:

– Recalculate landed costs under the new rules for:

• Products that will move into Schedule 2A (duty reduction vs. prior 15% minimum).
• Products that will be in Schedule 2B (confirmation that only MFN applies).

– Adjust pricing, sourcing, and supply chain decisions accordingly.

• For products remaining under the 15% minimum rule:

– Confirm that your cost models reflect the combined MFN + reciprocal duty.

5.5 Monitor for implementing guidance

• U.S. Customs and Border Protection (CBP) is expected to issue:

– CSMS messages and/or a Federal Register notice specifying:

• Effective date of the agreement.
• Any new Chapter 99 provisions or special program indicators for Taiwan reciprocal tariff treatment.
• Claim procedures and documentation requirements.
• Compliance teams should:

– Subscribe to CBP and USTR updates.

– Update internal SOPs for entry filing once operational details are available.

5.6 Risk management and audits

• Maintain documentation:

– Origin evidence for Taiwan-origin status.

– HTS classification support.

– Internal mapping of HTS lines to Schedules 2A/2B.

• Prepare for post-entry audits:

– CBP may verify correct application of reciprocal tariffs and origin claims.

– Ensure brokers are instructed and contracts clearly allocate responsibility for correct duty calculation.

6. References

Primary agreement and schedules (USTR):

• Main Agreement PDF (sanitized text, including Annexes and General Notes):

– https://ustr.gov/sites/default/files/files/Press/Releases/2026/AIT-TECRO%20ART%20sanitized.pdf

Key sections for U.S. import duty treatment:

• Annex 1 – Schedule 2 (Tariff Schedule of the Territory Represented by AIT):

– General Notes 1–5 (especially Notes 2–5 on reciprocal tariffs and Schedules 2A/2B).

• Executive Orders referenced:

– EO 14257 (April 2, 2025) – Reciprocal Tariffs: check Federal Register / White House archives.

– EO 14360 (November 14, 2025) – Modifying scope for certain agricultural products.

Additional documents (from USTR press release page):

• Text of the Agreement on Reciprocal Trade – link on USTR press release page.
• Tariff schedule – separate PDF(s) containing the full line-by-line Schedules 1, 2A, and 2B.
• Fact Sheet – summary of policy objectives and sectoral impacts.

Action for compliance teams: obtain the full tariff schedule PDF(s) from USTR, extract Schedules 2A and 2B, and integrate them into your HTS mapping and duty calculation tools before the agreement’s entry into force.