The U.S. government has announced a provisional equal tariff rate of 20% for Taiwan, and negotiations between Taiwan and the U.S. are ongoing. Scholars have warned that about 30% of Taiwan's exports go to China, and during negotiations, how Taiwan can prove to the U.S. that it is not helping China 'wash the origin' is a key point the government should focus on explaining to the U.S. Otherwise, according to U.S. standards, the tariff for 'washing the origin' would be set at 40%.

The Institute of Economics, Academia Sinica, today held a forum titled 'China's Economic Development Strategy in the New Situation of Trump 2.0.' Assistant Research Fellow Wang Guochen from the China Economic Research Institute of the Institute of Economics, Academia Sinica, was interviewed on the topic of equal tariffs. He said that based on the experiences of Thailand, Vietnam, and Indonesia, as well as the position publicly stated by the U.S. Department of State, the U.S. equal tariff is in fact aimed at China's circumvention, i.e., the 'washing the origin' measure.

Wang Guochen pointed out that using today's news topic, for example, the Chinese car brand BYD is reported to have intentions to enter Taiwan, the current government has controls over Chinese cars entering Taiwan, which is not a big problem. However, some legislators and BYD agents have had meals together, and the development of this matter needs to be closely monitored, because this raises another issue: Taiwan exports about 30% to China. If future exports to China increase back to 40%, it could exacerbate the U.S. concerns about Taiwan helping China 'wash the origin,' which is worth thinking about.

Wang Guochen frankly stated that the equal tariff rate for Taiwan is 20%, but observing the situations of other countries in the past, 'the official tariff rate for 'washing the origin' is 40%.' If Taiwan is stuck between the U.S. and China, mixed with factors of China's circumvention and 'washing the origin,' this will be an adverse factor for the subsequent negotiations between Taiwan and the U.S. and economic development.

Wang Guochen suggested that government departments should adopt the concept of 'carbon footprint' to establish a standard for the proportion of manufacturing involving China, and use this to negotiate with the U.S. on how to determine and distinguish the status of Taiwan's exports.

When asked about the news during the Taiwan-U.S. negotiations that TSMC was reportedly asked by the U.S. side to invest $40 billion, Wang Guochen said that this information could not be confirmed. However, he believed that equal tariffs involve the entire industry in Taiwan, including industries such as machine tools, which are not as competitive as TSMC. Therefore, the focus should be on equal tariffs, trying to keep the tax rate as low as possible, and negotiating separately from the 232 investigation. After all, Taiwan's semiconductor industry, especially TSMC, has the ability to pass on tariffs.

According to Google News, follow CNA for updates. Regarding the U.S. attitude, Wang Guochen analyzed that TSMC's market position is almost globally monopolistic. If the U.S. wants to take action against TSMC, even without using the 232 clause, they could use anti-trust measures. Since this step has not been taken, it shows that the U.S. still leaves room for Taiwan.

Wang Guochen believes that the negotiations between Taiwan and the U.S. on equal tariffs have taken a long time. In addition to the external factors mentioned, such as diplomacy and politics, it may also be due to the emphasis on economic security by the Taiwan government, especially food safety. The U.S. requires countries to open up their markets for U.S. agricultural products, but only the Chinese-speaking communities eat offal. How to handle the offal of U.S. pigs and cows is a problem.