Brian Hioeby Brian Hioe
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Photo Credit: Jaw Shaw-kong/Facebook
THE PAN-BLUE CAMP has hit out at US-Taiwan ties, through claims that the US intends to impose a 32% tariff rate on Taiwan. This proves a charged issue ahead of the recall vote set to take place on Saturday, as pan-Blue figures have begun claiming that the eventual tariff rate imposed on Taiwan will be 32%.
At present, the Lai administration is in the midst of negotiations over tariffs with the US. The Lai administration has emphasized the role played by Taiwanese diplomats engaged in negotiating with the Trump administration in its optics. Vice Premier Cheng Li-chiun has been dispatched to the US to lead negotiations.
Most likely, when a deal is secured, the Lai administration intends to tout this as a high-profile win. This is why the KMT has hit out at the idea. KMT members such as legislator Chang Chia-chun allege that Taiwan has already been notified as to its tariff rate, but the DPP is hiding this in order to deceive the public ahead of the recall.
Similarly, the KMT has framed the DPP as lacking in transparency for not disclosing details of trade negotiations with the US. At the same time, details of such negotiations are normally kept under wraps, and disclosing details ahead of time can scupper deals.
Claims that the US would impose a 32% tariff rate are of unclear origin and may originate online, but have been picked up and amplified primarily by pan-Blue commentators such as Jaw Shaw-Kong. The Ministry of Economic Affairs has denied that this is the case, stating that such claims are disinformation. The American Institute in Taiwan has also stated that negotiations are ongoing and that official channels should be the source of information about tariff rates.
Minister of Economic Affairs JW Kuo has stated that Taiwan expects a tariff rate of lower than 25%, in line with or lower than tariffs imposed on South Korea and Japan. The Lai administration will be able to frame it as a win if Taiwan has equal or lower tariffs to South Korea and Japan. Namely, Taiwan sees itself as on the same economic level of development as South Korea and Japan, which is why such tariff rates would be considered politically acceptable.
Lai administration officials have asserted that while the Trump administration had originally set a deadline for tariffs of August 1, trade negotiators have indicated that negotiations may continue beyond that date. As such, it is possible that Taiwan will not know its tariff rate by the time of the recall vote.
The original tariff rate that Trump announced for Taiwan in April was 32%. If this were the final tariff rate, that would suggest that the DPP had not been able to negotiate any change in tariffs.
The mercuriality of the Trump administration is quite visible in light of the tariffs, which have been haphazardly applied internationally. High tariffs have been imposed on countries that do not, in fact, have a trade deficit with the US. It is suspected that the original numbers proposed by the Trump administration were arrived at through consulting AI. To this extent, the Trump administration probably does not understand that imposing tariffs globally will cause prices in the US to rise.
It is unclear whether the Trump administration is aware of the impact that tariffs could have in Taiwan. Indeed, it proves unclear whether the Trump administration realizes that it is in its interests to shore up faith in the US regionally, given the turmoil caused by the tariffs.
Where Taiwan is concerned, the Trump administration has periodically hit out at Taiwan with the accusation of stealing US jobs, but may be pacified by TSMC announcing a 100 billion USD investment in the US. The Trump administration, too, currently is pushing for 1 billion USD in aid for defense to Taiwan.
It is not impossible that Taiwan unexpectedly sees a slap in the face from the Trump administration. Taiwan’s dominance in the field of semiconductors sets it apart from South Korea and Japan, potentially leading to a higher tariff rate, not a lower one. But if the pan-Blue camp circulates claims that are later proven to be wrong, this would in fact be damaging to it. It is possible that the pan-Blue camp is acting on sources who are convinced that the tariff rate is genuinely 32%, or that it views it as politically more advantageous to circulate disinformation that may later be proven wrong. It is not impossible that such disinformation is ultimately of Chinese origin either.
More generally, that the tariffs loom over the recalls shows that the Lai administration’s standing in Taiwan is strongly linked to its foreign relations policy, particularly when it comes to maintaining a political relationship with the US. By contrast, the Lai administration may be weaker on domestic politics, with possible openings for the KMT to attack regarding the response to Typhoon Danas, or the handling of a scandal at National Taiwan Normal University about coerced blood sampling from students. However, it is probable that the tariffs prove more important than domestic political scandals when it comes to the attention span of the public, given how they stand to impact Taiwan as a whole.
In this sense, the KMT is again leaning into US-skepticism as a means of attacking the Lai administration. The Trump administration’s unpredictable trade policy provides easy fodder for US-skepticism.