The US has begun implementing non-semiconductor tariff relief under the Taiwan-US investment memorandum of understanding, a move that will lower duties on Taiwanese auto parts, wood products, and aircraft components. The change could strengthen Taiwan's exporters and reshape supply chains for global manufacturers and airlines that rely on these inputs.
Relief takes effect
Taiwan's Executive Yuan said on May 28 that the US previewed on May 27 in the Federal Register Public Inspection page that it would soon officially announce more favorable Section 232 tariff treatment for certain Taiwanese non-semiconductor products, retroactive to May 1, 2026. Vice Premier Li-chiun Cheng said the change implements the non-semiconductor Section 232 relief specified in the January 15, 2026, investment MOU and will help boost international competitiveness and support Taiwanese firms expanding in the US market.
Three pillars of the MOU
The investment MOU signed on January 15, 2026, included three main measures: a reciprocal tariff rate of 15% without stacking most-favored-nation treatment, Section 232 relief for semiconductors and derivative products, and Section 232 relief for non-semiconductor products. Because the US has not imposed Section 232 tariffs on Taiwan's semiconductors and related derivatives, the non-semiconductor package is being implemented first.
Sector-by-sector breakdown
The notice indicates that tariffs on auto parts will fall to 15% from an average of 26.71%, reflecting the combination of the original 25% Section 232 tariff and MFN rates. Certain upholstered wooden furniture, kitchen cabinets, and vanities under lumber and wood derivatives will see duties reduced from 25% to 15%. The aviation sector stands to gain the most: steel, aluminum, and copper derivative products used in aircraft parts, which faced Section 232 tariffs ranging from 15% to 50%, will be fully exempt from Section 232 duties and pay only MFN rates. Tariffs on related products will therefore drop from a range of 15% to 55.7% down to 0% to 6.6%, averaging about 1.12%.
Negotiations pave the way
The Executive Yuan said Taiwan continued negotiations with the US Department of Commerce in March and April 2026 to press for non-semiconductor items to take effect first. After both sides finalized the list and US interagency procedures were completed, Washington moved to implement the relief earlier. The tariff cuts are expected to strengthen price competitiveness for Taiwan's auto parts, wood products, and aviation supply-chain exports to the US. The US has not yet announced details on the Section 232 relief arrangement for semiconductors and derivative products.
Article translated by Jingyue Hsiao and edited by Jerry Chen
