MOEA: US Section 301 Tariffs Won't Stack with Section 122; Taiwan Has Relative Advantage
In response to the US Commerce Department's plan to impose 10% tariffs on Taiwan and 13 other countries under Section 301 over forced labor concerns, Taiwan's Ministry of Economic Affairs (MOEA) stated that the current Section 122 tariffs will expire on July 24 and be reduced to zero, preventing any stacking of tariffs. Taiwan, having already completed agreements with the US, holds a relative advantage and is unlikely to face unfair treatment.
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- 📰 Published: June 3, 2026 at 21:12
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(Central News Agency, Reporter Zeng Yunting, Taipei, 3rd) The US Commerce Department, citing forced labor concerns, plans to impose 10% tariffs on Taiwan and 13 other countries under Section 301 of the Trade Act of 1974. In response, Taiwan's Ministry of Economic Affairs (MOEA) stated today that it is widely expected the US will complete the Section 301 investigation and announce final tariff rates before the Section 122 tariffs expire. The current Section 122 tariffs will be reduced to zero upon expiration, preventing any stacking of Section 122 and Section 301 tariffs.
The MOEA further pointed out that, considering Taiwan has already completed agreements with the US and holds a relative advantage in tariff rates, it should not face unfair treatment.
The legal basis for the US reciprocal tariff rates expired, leading to the adoption of Section 122 of the Trade Act of 1974, which temporarily imposes a uniform 10% tariff globally, stacked on top of existing MFN rates, for a maximum of 150 days until the end of July. The US Trade Representative (USTR) released a report on June 2 (US Eastern Time) under Section 301 of the Trade Act of 1974 regarding the "Import Ban on Goods Produced by Forced Labor," recommending additional tariffs of 10% or 12.5% on 60 global economies. Taiwan is listed among 14 countries with a recommended tariff rate of 10%.
The MOEA noted that the current US tariff framework for imported products is mainly divided into two categories: one based on Section 232 of the Trade Act of 1974 (covering items like steel, aluminum, copper, auto parts, lumber, semiconductors, and pharmaceuticals), and the other based on Section 122 of the same act.
The US implemented Section 122 on February 24 of this year as a transitional legal basis for 150 days, expected to expire on July 24.
The MOEA explained that the USTR launched two Section 301 investigations on March 11 and 12, focusing on "Structural Overcapacity in Manufacturing Sectors" and "Failure to Act on Forced Labor." It is widely expected that the US will complete the Section 301 investigations and announce final tariff rates for each country before the Section 122 tariffs expire. At that point, the Section 301 framework will replace the existing tariff mechanism, preventing any stacking of Section 122 and Section 301 tariffs.
The MOEA further stated that the current Section 122 is a transitional legal basis to continue tariff policy following a US Supreme Court ruling, valid for 150 days. The US simultaneously launched the Section 301 investigations to replace the reciprocal tariff basis originally established under the International Emergency Economic Powers Act (IEEPA). Future final tariff rates for each country will be determined under the Section 301 framework, and the tariffs levied under Section 122 will be reduced to zero upon the expiration of its implementation period.
Regarding the investigation results, the MOEA stated that the US conducted Section 301 investigations on 60 economies, collecting testimony from nearly 60 witnesses and over 500 written comments and rebuttals, completing the determination process on June 2.
The determination results show that 54 economies, including Taiwan, were found to have "not implemented and not effectively enforced import bans on goods produced by forced labor." Six other economies—Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan—were found to have not effectively enforced related bans. The US considers the actions of these economies to be "unreasonable," undermining international goals to eradicate forced labor and distorting market competition.
The MOEA noted that, regarding tariff recommendations, the US plans to impose a 10% tariff on economies that have implemented or committed to implementing forced labor bans, which includes Taiwan. Other economies would face a 12.5% tariff. However, products covered by the USMCA, items under Section 232 tariffs, and certain products under Central American Free Trade Agreements are excluded.
The MOEA stated that, according to US procedures, applications for hearing participation and testimony summaries must be submitted by June 22. The deadline for written comments is July 6, with a hearing scheduled for July 7. Rebuttal comments may be submitted within five days after the hearing.
The MOEA emphasized that it will continue close communication with the US in coordination with the Taiwan-US negotiation team. Given that economies which have completed agreements with the US hold a relative advantage in tariff rates, Taiwan is unlikely to face unfair treatment. The government will continue to strive to protect national and industrial interests. (Editor: Yang Kaixiang) 1150603
The MOEA further pointed out that, considering Taiwan has already completed agreements with the US and holds a relative advantage in tariff rates, it should not face unfair treatment.
The legal basis for the US reciprocal tariff rates expired, leading to the adoption of Section 122 of the Trade Act of 1974, which temporarily imposes a uniform 10% tariff globally, stacked on top of existing MFN rates, for a maximum of 150 days until the end of July. The US Trade Representative (USTR) released a report on June 2 (US Eastern Time) under Section 301 of the Trade Act of 1974 regarding the "Import Ban on Goods Produced by Forced Labor," recommending additional tariffs of 10% or 12.5% on 60 global economies. Taiwan is listed among 14 countries with a recommended tariff rate of 10%.
The MOEA noted that the current US tariff framework for imported products is mainly divided into two categories: one based on Section 232 of the Trade Act of 1974 (covering items like steel, aluminum, copper, auto parts, lumber, semiconductors, and pharmaceuticals), and the other based on Section 122 of the same act.
The US implemented Section 122 on February 24 of this year as a transitional legal basis for 150 days, expected to expire on July 24.
The MOEA explained that the USTR launched two Section 301 investigations on March 11 and 12, focusing on "Structural Overcapacity in Manufacturing Sectors" and "Failure to Act on Forced Labor." It is widely expected that the US will complete the Section 301 investigations and announce final tariff rates for each country before the Section 122 tariffs expire. At that point, the Section 301 framework will replace the existing tariff mechanism, preventing any stacking of Section 122 and Section 301 tariffs.
The MOEA further stated that the current Section 122 is a transitional legal basis to continue tariff policy following a US Supreme Court ruling, valid for 150 days. The US simultaneously launched the Section 301 investigations to replace the reciprocal tariff basis originally established under the International Emergency Economic Powers Act (IEEPA). Future final tariff rates for each country will be determined under the Section 301 framework, and the tariffs levied under Section 122 will be reduced to zero upon the expiration of its implementation period.
Regarding the investigation results, the MOEA stated that the US conducted Section 301 investigations on 60 economies, collecting testimony from nearly 60 witnesses and over 500 written comments and rebuttals, completing the determination process on June 2.
The determination results show that 54 economies, including Taiwan, were found to have "not implemented and not effectively enforced import bans on goods produced by forced labor." Six other economies—Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan—were found to have not effectively enforced related bans. The US considers the actions of these economies to be "unreasonable," undermining international goals to eradicate forced labor and distorting market competition.
The MOEA noted that, regarding tariff recommendations, the US plans to impose a 10% tariff on economies that have implemented or committed to implementing forced labor bans, which includes Taiwan. Other economies would face a 12.5% tariff. However, products covered by the USMCA, items under Section 232 tariffs, and certain products under Central American Free Trade Agreements are excluded.
The MOEA stated that, according to US procedures, applications for hearing participation and testimony summaries must be submitted by June 22. The deadline for written comments is July 6, with a hearing scheduled for July 7. Rebuttal comments may be submitted within five days after the hearing.
The MOEA emphasized that it will continue close communication with the US in coordination with the Taiwan-US negotiation team. Given that economies which have completed agreements with the US hold a relative advantage in tariff rates, Taiwan is unlikely to face unfair treatment. The government will continue to strive to protect national and industrial interests. (Editor: Yang Kaixiang) 1150603
FAQ
Why is the US planning to impose tariffs on Taiwan?
The US is proposing a 10% tariff on Taiwan and 13 other countries under Section 301 of the Trade Act of 1974, citing forced labor concerns.
When will the Section 122 tariffs expire?
The Section 122 tariffs were implemented on February 24 and are expected to expire on July 24 after a 150-day period.
How is Taiwan's government responding to these tariffs?
Taiwan's MOEA is coordinating with the Taiwan-US negotiation team to maintain close communication with the US and protect national and industrial interests.