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New legislation
Taiwan's Carbon Border Adjustment Mechanism Set to Launch in 2025
On July 24, 2025, the Climate Change Administration of Taiwan's Ministry of Environment issued a press release following a press conference regarding the progress of Taiwan's Carbon Border Adjustment Mechanism (CBAM).
The press release emphasized the ongoing and planned consultations between the Climate Change Administration and relevant industry associations, particularly those in the steel and cement sectors. These discussions will focus on various aspects, including the scope of regulated products, carbon emissions values, and the calculation of carbon borders. The goal is to finalize the relevant regulations by the first half of 2026 and to begin reporting the embedded carbon emissions of regulated products in the first quarter of 2027. Key elements of the Taiwan CBAM, such as reporting entities, regulated products, calculation methods, and reporting procedures, are expected to be finalized for consultation by the end of 2025.
Under the current plan, Taiwan's CBAM will adopt calculation methods similar to those of the EU CBAM, albeit with some simplifications. Reporting entities will include importers and authorized declarants of imported products, as well as manufacturers of domestically produced goods. The phased introduction of reporting products will prioritize those from high-emission industries, particularly focusing on products already subject to carbon fees or their entire value chain. Draft reporting templates and guidance are anticipated to be released by December 2025.
Deputy Minister of Environment Wen-Chen Shih confirmed that carbon fees already paid in Taiwan could be used to offset CBAM fees under the new regulations, ensuring no double counting occurs. However, the exact amount of the offset remains uncertain as the latest revisions to the EU CBAM are still being finalized. The Taiwanese authorities have also maintained close communication with counterparts in the UK and the EU to express their views on the jurisdictions' CBAM regulations, aiming to protect the rights and interests of affected Taiwanese industries.
US-EU Framework Agreement on trade
On the 21st of August the US and the EU reached an agreement on a Framework on an Agreement on Reciprocal, Fair and Balanced Trade ("Framework Agreement"). The key terms of the Framework Agreement include:
- The EU will eliminate tariffs on all US industrial goods and provide preferential market access for a wide range of US seafood and agricultural goods. The EU will also extend the Tariff Agreement on lobster, which expired 31 July 2025. Additionally, the scope will be expanded to include processed lobster.
a. As soon as these tariff reductions are enacted, the US will reduce tariffs on automobiles and automobile parts - The US will apply the higher of either the US Most Favored Nation (MFN) tariff rate or a tariff rate of 15% on originating goods of the EU. For the following products, the US will only apply the MFN tariff:
a. Unavailable natural resources (including cork);
b. All aircraft and aircraft parts;
c. Generic pharmaceuticals and their ingredients and chemical precursors. - The US will ensure that the tariff rate applied to pharmaceuticals, semiconductors, and lumber does not exceed 15%.
- The US and the EU will
EU Commission proposal for tariff reduction US products following EU-US trade framework agreement
On 28 August 2025, the EU Commission published two proposals concerning tariff reductions on a broad range of US products, as part of the implementation of the EU-US trade Framework Agreement of 27 July 2025.
Highlights of the proposals:
- The first one proposes a 0% tariff on lobsters (including processed lobster), retroactively as of 1 August 2025.
- The second one proposes:
- A 0% ad valorem tariff on US goods listed in Annexes I and II (specific duties might continue to apply for goods listed in Annex II).
- The opening of tariff quotas for US goods listed in Annex III.
- Proof of US origin must follow the non-preferential rules under the EU customs legislation.
- These measures will only take effect once the regulation enters into force, following the standard legislative process.
- The US currently imposes a 27.5% tariff on EU cars. This will be reduced to 15% once the EU publishes a proposal to eliminate import duties on various US goods. The reduction is expected to apply retroactively from 1 August, and US importers of EU cars may therefore be eligible for refund claims.
The proposals include a suspension mechanism allowing the EU to suspend the agreement if the US fails to meet its commitments.
Recommended actions for businesses:
- EU importers of US products:
- Review the HS code lists in the annexes to assess the impact of the proposed tariff reductions.
- Prepare solid origin documentation in anticipation of the regulation’s entry into force.
- Exporters of EU cars to the US should ensure that robust origin documentation is available to support refund claims. Note that US origin rules differ from EU rules, so an EU-issued certificate of origin alone may not suffice.