Will the US 25% auto tariff be relaxed? Will Taiwanese buy American-spec cars at sweet prices?

There have been new developments in the recent tariff negotiations between Taiwan and the United States. There are rumors in the market that the prices of American-standard cars will drop in the future? Foreign exchange vehicles will usher in sweet prices? But do you know? A tariff reduction alone does not mean that car prices will really plummet. The real key is actually - commodity tax!

In this article, we will help you clarify several important concepts and answer the three most pressing questions that consumers are concerned about:

• Will the United States really reduce taxes on Taiwanese cars?
• Will the prices of US-spec cars be significantly reduced?
• What will happen if even the "goods tax" is reduced?

Is it true that Taiwan and the United States will relax auto tariffs?

The United States itself imposes a 25% tariff on global car imports, not Taiwan's imports of American cars.

The content of the negotiations currently circulating on the Internet is that the Taiwan government is considering proactively lowering tariffs on "American cars" (currently about 17.5%) in exchange for the United States lowering tariffs on Taiwan's export products such as machine tools and bicycle parts.

In other words, the cost of importing American cars into Taiwan may become "slightly" cheaper due to the tariff reduction.

Which car models are most likely to benefit?

The biggest winners will be imported cars made in the United States that meet the preferences of the Taiwanese market, such as:

• BMW X5, X3, X7 (produced in South Carolina, USA)
• Mercedes-Benz GLC, GLE, C-Class (partially produced in the U.S.)
• Ford, Chevrolet and other American models

If the tariffs are indeed lowered, the import costs of these models could drop by about 10-15%, which would be a big incentive for consumers who want to buy mid- to high-end SUVs.

What really determines the price is not the tariff, but the "goods tax"!

But the question is: tariffs have dropped, so why are car prices still not sweet enough?

The answer is: Taiwan also has a **"goods tax"** for imported cars (especially those with large displacement and high unit price), which is levied according to displacement, with tax rates ranging from 17.5% to 60%! Let's take a look at a simple illustration:

You will find that even if tariffs are lowered, as long as the excise tax remains unchanged, the price of cars will still be shockingly high!

? What will happen if even the "goods tax" is reduced?

This is where it really pays to pay close attention. If even the commodity tax is adjusted or relaxed in the future, not only will consumers benefit directly, but the entire Taiwanese auto market will also see a "major reshuffle."

For consumers:

• Imported luxury cars are no longer sky-high priced, and more people can easily buy their favorite models
• More choices, no longer passively choose domestic models

Regarding industrial structure:

• Domestic cars (Toyota, Honda, Nissan, etc.) will lose their price advantage and need to strengthen their equipment and brand power
• The pressure on the local supply chain is increasing, and it must be transformed or directed to exports
• Parallel import car dealers and foreign exchange car dealers will usher in more benefits, diversified services and intensified competition

Conclusion: Don’t just look at “whether tariffs are reduced or not”, commodity tax is the key!

Although the topic of "loosening US auto tariffs" has sparked heated discussions, as people who have been observing the auto industry for many years, we would like to say:

What can truly change the price and market structure of imported cars is a comprehensive tax reform.

If you are also looking forward to the future prices of imported cars, you might as well continue to pay attention to tax changes and look for professional and honest foreign exchange car dealers who can provide the most transparent quotations and consultations.