Last week, President Donald Trump’s administration announced a sweeping new legal regime for tariffs on countries across the world, citing forced labor concerns in allies and adversaries alike. Taiwan was among the countries assigned a 10% tariff for what the United States said was a failure to impose prohibitions on imports of products manufactured using forced labor.
Taiwan committed to address the Trump administration’s forced labor concerns as part of the trade agreement it signed with the U.S. in January, which fixed its general tariff rate at 15%. But in the report it released last week, the office of the U.S. Trade Representative wrote that Taiwan’s “failure to impose and effectively enforce a forced labor import prohibition is unreasonable” and that it “burdens or restricts U.S. commerce.”
Riley Walters, a senior fellow at the Hudson Institute who specializes in international economics, told Domino Theory that he does not expect the announcement to affect Taiwan’s actual tariff rate, which has been at 15% since January, when it came to its trade agreement with the Trump administration.
Taiwan had initially faced a 32% tariff rate that the Trump administration imposed during “Liberation Day” last April. Taiwan’s government negotiated that number down to the same 15% that the Trump administration agreed to with Japan and South Korea.
In February, the Supreme Court struck down the legal authority under which the U.S. had imposed those initial tariffs. But Walters said that the court’s decision did not affect Taiwan. “The tariff rate didn’t change following the announcement by SCOTUS, just the legal authority,” he said, using an acronym for the Supreme Court.
Taiwan is still waiting for the second half of the U.S. Trade Representative’s findings, which is expected to levy tariffs on countries according to their overproduction of export goods. Taiwan’s overproduction rate is likely to be set at 5%, which when added to the 10% for forced labor, would match the total of 15% negotiated under the existing agreement, Walters said.
“Section 301 may be used to respond to unjustifiable, unreasonable, or discriminatory foreign government acts, policies, or practices that burden or restrict U.S. commerce,” the Trump administration wrote in its report.
In 2025, the United States had a $146.8 billion trade deficit with Taiwan, one of the largest in the world. The United States became Taiwan’s top trading partner in the first quarter of 2026 on the strength of semiconductor exports, passing China and Hong Kong for the first time in decades.
The average U.S. tariff on imported Taiwanese goods stood at 7% as of May, Taiwan’s representative to Singapore said recently. That number is significantly lower than the effective rates on Taiwan’s regional peers Japan and South Korea, owing largely to the exemptions for semiconductors and AI hardware that Taiwan’s government secured during negotiations earlier this year.
In a press conference last Thursday, Taiwan’s government vowed to address the Trump administration’s forced labor concerns. “The Ministry of Labor and the Ministry of Economic Affairs are to establish an interministerial review procedure,” said Michelle Lee (李慧芝), a spokesperson for the Executive Yuan.
But Walters said that there is little Taiwan can do to avoid the new tariff regime. “There’s nothing to suggest this tariff rate will go down, even if Taiwan addresses the Trump administration’s foreign labor concerns,” he said.
The worst-case scenario, Walters said, is that the White House concludes in a year or two that Taiwan isn’t doing enough to address forced labor, and threatens to raise the rate above 10%.
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