TAIPEI (Taiwan News) — Taiwan is aiming for a competitive tariff deal with the US and TSMC’s deepening investment may give it the leverage to secure one, Chung-Hua Institution for Economic Research said Friday.

CIER President Lien Hsien-ming (連賢明) said Japan’s recent trade agreement with Washington sets a precedent, per CNA. With TSMC already investing NT$4.87 trillion (US$165 billion) in the US, Lien believes Taiwan could land a final tariff rate between 15% and 20%.

Lien said Taiwan has been preparing its negotiating position. Beyond chip investment, Taiwan is in talks with Washington on energy, market access, and industrial cooperation. He argued that aggressive tariffs on Taiwan could fuel inflation in the US, further strengthening Taiwan’s case.

The comments come as US tariffs reshape global trade. Japan and South Korea were initially hit with 25% duties, but Japan quickly struck a deal for reduced rates.  

CIER also released a midyear survey showing Taiwanese manufacturers expect a 1.55% revenue decline this year due to tariffs and currency volatility. Procurement costs are up, while prices and capacity utilization are falling. Capital spending is forecast to rise 5.35%, down from last year’s 13.15% jump.

The survey found that 74% of manufacturing managers now cite exchange rate fluctuations as their top concern, up sharply from December. US trade policies came in second, followed by US economic trends, energy prices, and Fed policy.

In the services sector, exchange rate risks and US trade strategy have overtaken long-standing concerns over labor shortages, which had topped the list since 2023.