The United States and the United Kingdom have reached their first trade agreement: reduction in car tariffs and exemptions on steel and aluminum products, sparking concerns about Taiwan's tariff treatment.

Taiwan • Politics • 05/10 07:03
The United States and the United Kingdom have reached their first trade agreement: reduction in car tariffs and exemptions on steel and aluminum products, sparking concerns about Taiwan's tariff treatment.

On May 8, 2025, the United States and the United Kingdom announced the signing of the "Economic Prosperity Agreement," which marks the first bilateral trade agreement since President Trump initiated the "Reciprocal Tariff Policy" in April. The agreement includes a reduction in automobile tariffs, the establishment of import quotas, tariff exemptions for steel and aluminum products, and creates $5 billion in business opportunities for U.S. exporters. This move has raised concerns regarding the future tariff treatment of other trade partners, particularly Taiwan, since the U.S. imposes a 32% tariff on most Taiwanese products, with only a few high-tech products being exempt.

Key Updates

05/10 07:03

The United States and the United Kingdom have reached their first trade agreement: reduction in car tariffs and exemptions on steel and aluminum products, sparking concerns about Taiwan's tariff treatment.

On May 8, 2025, the United States and the United Kingdom announced the signing of the "Economic Prosperity Agreement," which marks the first bilateral trade agreement since President Trump initiated the "Reciprocal Tariff Policy" in April. The agreement includes a reduction in automobile tariffs, the establishment of import quotas, tariff exemptions for steel and aluminum products, and creates $5 billion in business opportunities for U.S. exporters. This move has raised concerns regarding the future tariff treatment of other trade partners, particularly Taiwan, since the U.S. imposes a 32% tariff on most Taiwanese products, with only a few high-tech products being exempt.

05/09 11:04

High-level U.S.-China economic and trade talks are held in Switzerland: He Lifeng and the U.S. Treasury Secretary discuss tariff issues

On May 9, 2025, Vice Premier of the State Council of China, He Lifeng, traveled to Switzerland to hold high-level economic and trade talks with U.S. Treasury Secretary Scott Bessent in Geneva. This marks the first major engagement since the onset of the U.S.-China trade war. The talks occur amid economic pressure and the risk of international isolation facing China, with both parties prepared to negotiate on tariff matters. The meeting underscores the sensitivity of diplomatic interactions between the U.S. and China, with both sides offering differing accounts of who initiated the talks, highlighting deep-rooted mistrust.

05/09 11:04

India aims to cut tariffs and relax export controls to achieve a landmark trade agreement with the United States.

Following U.S. President Trump's announcement to pause new global tariff measures for 90 days, India is pushing to reach a bilateral trade agreement with the United States. India has proposed a nine-point plan to narrow the tariff gap from 13% to under 4% and apply zero tariffs to 60% of U.S. imports. India also plans to ease export controls on high-value U.S. products, including sectors like aircraft parts and luxury cars. Negotiations are speeding up between the two countries, and the Indian delegation is expected to visit the U.S. later this month to push forward the agreement process.

05/09 07:08

Starlink Becomes a New Bargaining Chip in U.S. Trade Negotiations: Vietnam and Lesotho Sign Agreements, India Could Be the Next Target

President Trump of the United States has used SpaceX's Starlink satellite network service as an informal negotiation tool in global tariff negotiations. The U.S. State Department is urging several countries to approve Starlink's market entry, with Vietnam and Lesotho already having signed agreements, and India potentially being the next target. This move is viewed as a strategy to enhance trade relations. The U.S. dollar index has seen a slight decline as the market focuses on U.S. trade policy and interest rate trends.

05/09 02:00

The US-UK trade agreement sparks a sovereignty dispute: The US gains veto power on Chinese investments, and the film and television industries face tariff threats.

On May 9, 2025, UK Prime Minister Skel and US President Trump announced the UK-US trade agreement. The agreement provides tariff reductions for the UK's automotive and steel industries, but grants the US the right to review significant Chinese investments in the UK, raising concerns about UK sovereignty. The film and television industry was excluded from the agreement and is facing the threat of high tariffs from the US. As a result, the Skel government is facing criticism and pressure from domestic political and industrial circles.

05/08 23:02

Thaw in US-China Trade War: Ahead of Geneva Talks, Trump Stands Firm on Maintaining Tariffs, Video Translation Error Leads to Misunderstanding

The United States and China will hold high-level economic and trade talks in Geneva, Switzerland, on May 10 and 11, 2025. This will be the first face-to-face dialogue since the Trump administration imposed a 145% increase in tariffs on Chinese goods. China claims the talks are at the U.S.'s request, while the U.S. states that China initiated the contact. Trump emphasized that he would not lower tariffs before the negotiations, but if the talks go well, adjustments might be considered. A video interview with Trump circulating online was found to be misinformation due to translation errors that caused misunderstandings.

05/08 19:02

Trump Signals Tariff Easing: Expresses a Friendly Stance on the Eve of U.S.-China Talks in Switzerland. U.S.-UK Trade Agreement Signed at the Same Time.

On May 8, President Donald Trump stated that if the upcoming high-level economic and trade talks between the U.S. and China in Geneva, Switzerland, go smoothly, he may consider reducing the 145% punitive tariffs on China. Trump emphasized China's desire to reach an agreement and described the talks as both friendly and substantive. That same day, the United States and the United Kingdom signed a trade agreement covering steel, aluminum, automobiles, and agricultural products. This marks the first bilateral agreement completed by the Trump administration since the implementation of global tariff policies, indicating a potential shift in U.S. trade policy direction.

05/08 13:02

U.S. Secretary of State Marco Rubio warns Caribbean countries to carefully choose their infrastructure partners, while the Chinese Ministry of Foreign Affairs strongly rebuts the warning.

On May 8, 2025, U.S. Secretary of State Marco Rubio, during a meeting with leaders of several Caribbean countries, warned these countries against collaborating with "malicious actors" such as the Chinese Communist Party in infrastructure cooperation. Chinese Foreign Ministry spokesperson Lin Jian denounced this remark as a "malicious attack," stressing that China-Caribbean cooperation is founded on equality and mutual benefit. This incident highlights the escalating competition for influence between the U.S. and China in the Caribbean.

05/08 05:02

The Trump administration is promoting the international expansion of Starlink: the strategy intertwining technology and diplomacy in trade negotiations

Against the backdrop of the Trump administration's trade war, the U.S. State Department and embassies abroad were revealed to be promoting Musk's Starlink entering various international markets. Although there is no evidence of tariff reductions being used as a bargaining chip, the promotion of Starlink is closely related to trade negotiations, raising concerns about potential government favoritism towards certain companies. The Biden administration has continued this approach, indicating that advancing the global reach of American tech companies is a strategic objective and to compete with China in the global telecommunications arena.

Core Terms of the US-UK Agreement: Automobiles, Steel and Aluminum, and Agricultural Products

According to the agreement details released by the US Department of Commerce and the White House, the US will implement a "tariff-rate quota" (TRQ) system for automobiles manufactured in the UK. Specifically, the UK can export up to 100,000 vehicles to the US annually at a tariff rate of 10%, significantly lower than the previous 27.5% (including a 2.5% base tariff and a 25% additional tariff). Any exports exceeding the quota will be subject to a high tariff of 25%.

This quota nearly covers the total number of vehicles the UK is expected to export to the US in 2024 (approximately 101,000 vehicles), representing a substantial concession for the UK automotive industry. President Trump stated that this arrangement is based on the fact that most UK car models are luxury vehicles and do not directly compete with US domestic models.

Regarding steel and aluminum products, the US agreed to lift the 25% tariffs on UK steel and aluminum, provided the UK meets US requirements for supply chain security and industry ownership. The UK government also pledged to partially nationalize its steel industry and implement anti-dumping measures similar to those in the US to address global steel overcapacity issues.

Additionally, the UK will open its market and reduce tariffs on US agricultural products such as beef and ethanol. US beef will receive a duty-free quota of 13,000 tons, and the ethanol tariff will be reduced to zero. The US estimates that this will create over $900 million in new business opportunities for American agricultural and food exporters.

Bilateral Trade Reciprocity: Boeing Orders and Removal of Non-Tariff Obstacles

As a condition of the exchange, the UK government promised to purchase $10 billion worth of aircraft from US company Boeing and to open its market to more US products, including alcohol, beef, fruits, vegetables, animal feed, tobacco, shellfish, chemicals, and textiles. The UK will also remove some non-tariff obstacles to simplify the customs process for US goods.

US Commerce Secretary Luttig noted that this agreement will create $5 billion in new market opportunities for US exporters, while maintaining a 10% global benchmark tariff on UK goods is expected to generate $6 billion in tariff revenue for the US.

Taiwan's Tariff Treatment Raises Concerns

Following the announcement of the US-UK agreement, Taiwan's political and industrial sectors expressed significant concern about their treatment under the new US tariff policy. According to data from Taiwan's Ministry of Finance and Ministry of Economic Affairs, the US will impose a 32% reciprocal tariff on most Taiwanese products starting in April 2025, with exemptions for only a few high-tech products like semiconductors. Taiwan is the US's seventh-largest trading partner, with exports to the US reaching $111.4 billion in 2024 and imports only $46.5 billion, resulting in a trade surplus of $64.9 billion.

Minister of Economic Affairs Chih-Hui Kuo pointed out that the US's maintenance of a 10% base tariff on the UK, reduction of steel and aluminum tariffs to 0%, and preferential tariff rates for automotive quotas indicate a certain degree of tariff exemption space for democratic allies. He emphasized that Taiwan should actively seek similar treatment, especially in strategic industries such as semiconductors, medical biotechnology, and precision manufacturing.

Currently, the US imposes high tariffs on Taiwan's auto parts, machine tools, and traditional machinery industries, while providing a 90-day temporary exemption for medical equipment and pharmaceuticals. The Taiwanese government has allocated a special budget of NT$410 billion to help affected industries cope with tariff impacts and proposed expanding imports of natural gas, agricultural products, and defense equipment from the US as bargaining chips for future negotiations.

Tariff-Rate Quota Model Becomes a New Paradigm in Negotiations

The "tariff-rate quota" system adopted in the US-UK agreement has become a new focus in international trade negotiations. Unlike traditional import quotas, tariff-rate quotas do not limit import quantities but apply different tariff rates to goods within and outside the quota, balancing market openness and industry protection. Officials from Taiwan's Ministry of Finance noted that Taiwan's tariff law also allows for the adoption of this system under specific circumstances, which could serve as a technical option in future negotiations with the US.

The US White House stated that the UK agreement will serve as a "basic guideline" for future negotiations with other trade partners, but President Trump emphasized that special arrangements like automotive quotas apply only to the UK, and other countries will not receive the same treatment. This stance also reflects the US strategy of adopting differential treatment for different trade partners, depending on their trade structure, strategic value, and political relations with the US.

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