US Tariff on Electronics from Taiwan

Taiwan is a critical electronics supplier to the United States, particularly for semiconductors. General electronics face 10% total, but chips face a higher 35%.

Base rate structure: 0% MFN (ITA) + 10% Section 122 = 10% total for most electronics. However, semiconductors are subject to an additional 25% Section 232 tariff, bringing the total for chips to 35%. Taiwan is not subject to Section 301 tariffs.

Taiwan's electronics exports to the US are dominated by: semiconductors (TSMC is the world's largest contract chip manufacturer), integrated circuits and chip packaging, LED and display panels, networking equipment (D-Link, Zyxel), computer peripherals, and printed circuit boards.

The SCOTUS ruling was hugely beneficial for Taiwan. The old IEEPA rate was 32%, making the pre-ruling total for general electronics approximately 32% and semiconductors approximately 57%. The drop to 10% Section 122 saved Taiwanese exporters 22 percentage points on general electronics.

For semiconductor importers specifically, the 35% rate (10% Section 122 + 25% Section 232) still makes Taiwan more expensive than TSMC's new Arizona fab (which avoids tariffs on domestically produced chips). However, the vast majority of advanced chip production remains in Taiwan, and the tariff cost is generally absorbed given the lack of alternatives for leading-edge nodes (3nm, 5nm).

Compared to other electronics sources: Mexico at 0% (USMCA), South Korea at 10% (with KORUS potential for 0%), Japan at 10%, and Vietnam at 10% are all competitive on general electronics. For semiconductors, Taiwan remains the dominant source despite the premium.

The Section 122 tariff expires ~July 24, 2026. Congress is considering semiconductor exemptions given supply chain concerns.