The United States has taken its first concrete step to implement a trade-and-security understanding with Taiwan, amending the Harmonized Tariff Schedule of the United States (HTSUS) to modify certain tariffs imposed under Section 232 of the Trade Expansion Act of 1962. The action, announced jointly by the Secretary of Commerce and the U.S. Trade Representative in a Federal Register notice published May 28, 2026 (document 2026-10571), carries out the tariff-related terms of a memorandum of understanding signed by the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office in the United States (TECRO) on January 15, 2026.
For a publication that tracks the policy and trade actions shaping the chip industry, no bilateral relationship matters more than the one between Washington and Taipei. Taiwan is home to the world's most advanced semiconductor manufacturing capacity, and the security of that capacity, and of the trade relationship that surrounds it, sits at the center of U.S. industrial and national-security strategy. The notice does not, on its face, touch chips, but its provenance and framing as a "trade and security agreement" place it squarely in the geopolitics of the semiconductor era.
The legal architecture behind the notice
The action rests on a chain of executive authority. According to the notice, President Trump issued Executive Order 14346 on September 5, 2025, modifying the scope of reciprocal tariffs and establishing procedures for implementing trade-and-security agreements. That order directed and authorized the Secretary of Commerce and the Trade Representative to implement framework or final trade-and-security agreements tied either to the national emergency declared in Executive Order 14257 of April 2, 2025, which regulated imports with a reciprocal tariff to address persistent goods-trade deficits, or to national-security findings made under Section 232. Section 232 is the statute that lets the executive branch restrict imports, typically through tariffs, when the Commerce Department finds they threaten national security; it is the same authority behind the steel and aluminum tariffs of recent years.
Against that backdrop, AIT and TECRO, the unofficial bodies through which the United States and Taiwan conduct relations in the absence of formal diplomatic ties, signed two instruments. The first, the January 15, 2026 memorandum of understanding relating to Taiwan-U.S. investment, committed the United States to modify certain Section 232 tariffs. The second, signed February 12, 2026, is the Agreement on Reciprocal Trade between the United States and Taiwan (the ART). The notice is careful to draw a line between them: both qualify for implementation under Executive Order 14346, but the United States is implementing only the MOU at this stage, because the broader ART has not yet entered into force.
What actually changed at the border
The tariff modifications are specific. The notice amends the HTSUS to implement the MOU's terms covering Section 232 tariffs applied to automobile parts, timber, lumber, and wood derivative products of Taiwan. In addition, the MOU provides that the United States will remove derivative Section 232 steel, aluminum, and copper tariffs from aircraft components that are products of Taiwan. The changes are retroactive in effect: while the notice itself is effective May 28, 2026, the HTSUS modifications in its annex apply to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern time on May 1, 2026. That retroactivity means importers of qualifying Taiwanese goods entered in early May may be positioned to benefit from the modified treatment.
None of the enumerated categories, auto parts, wood products, or aircraft components, is a semiconductor. But the structure of the deal is what matters for the chip beat. The MOU is explicitly an investment-and-security instrument, and the United States has repeatedly tied tariff relief and trade frameworks to commitments around manufacturing investment, including investment in the United States by Taiwanese firms. Taiwan's leading chipmaker has already committed to substantial U.S. fab construction, and U.S.-Taiwan economic diplomacy increasingly bundles tariffs, investment pledges, and supply-chain security into a single negotiation. A tariff concession on wood or aircraft parts can be a counterweight in a larger bargain whose center of gravity is advanced manufacturing.
The notice also illustrates how the current administration is operationalizing its tariff regime: not through across-the-board rates alone, but through bilateral agreements that selectively dial tariffs up or down as instruments of leverage. Executive Order 14346 created a procedural pathway for exactly this, allowing Commerce and USTR to translate negotiated understandings into concrete HTSUS amendments. The Taiwan MOU is one of the first such understandings to be implemented under that pathway, which makes it a template worth watching as similar deals with other partners take shape.
The verifiable substance is bounded by the notice. The United States has implemented the tariff-related elements of the January 2026 MOU by amending the HTSUS; the modifications cover Section 232 tariffs on Taiwanese auto parts, timber, lumber, and wood derivatives, and remove derivative steel, aluminum, and copper tariffs on Taiwanese aircraft components; the changes apply to entries on or after May 1, 2026; and the broader Agreement on Reciprocal Trade is not yet being implemented because it has not entered into force. For anyone tracking the semiconductor supply chain, the document is less important for the specific products it covers than for what it represents: the machinery of U.S.-Taiwan trade-and-security bargaining is now actively reshaping the tariff schedule, and the chip-investment dimension of that relationship is the reason it commands attention.
One further point deserves emphasis for readers parsing the document's significance. The notice draws a deliberate sequencing line: the MOU is being implemented now, the broader Agreement on Reciprocal Trade is not, because it has not yet entered into force. That staging is characteristic of how these arrangements are built. A memorandum of understanding sets out commitments that can be acted on quickly, here, specific tariff modifications, while the more comprehensive reciprocal-trade agreement remains a framework awaiting the procedural steps that bring it into legal effect. For the semiconductor relationship, the open question is how much of the eventual ART will touch chips, investment, and supply-chain security directly, and on what timeline. The May 2026 action is therefore best read as an early installment in a larger, still-unfolding negotiation rather than a finished settlement. Importers should track which elements of any future ART get implemented through subsequent HTSUS amendments, and analysts watching the chip dimension should watch for whether and how investment and technology commitments surface as those later instruments enter into force. The current notice tells us the process is live and producing concrete tariff changes; it does not yet tell us where the chip-specific terms, if any, will land.