Taiwan, despite its relatively small area and population, is among the world’s top twenty exporters (ranked 15th in 2020). Exports from Taiwan are crucial since they account for around 70% of its GDP. Importing from Taiwan can prove very profitable; this article presents the key-related issues.
International Trade in Taiwan
Nearly 90% of Taiwan’s exports go to North America and Europe, with the European Union’s largest trading partner. Taiwan, in turn, was the EU’s 15th foreign trade partner in 2018. The cooperation is growing intensively – the trade between the EU and Taiwan has increased eightfold over the past two decades.
Taiwan is the United States’ 9th trading partner with over $90 billion in total goods trade in 2020, of which nearly $67 billion were imports. The top import categories in that year were: electrical machinery, machinery, vehicles, iron and steel products, and plastics.
What Can You Import from Taiwan?
Taiwan is one of the world IT leaders and a major manufacturing hub of many types of computer hardware parts. It is no surprise that Taiwan’s main export category is electronics (1/3 of all exports). Other popular product categories include:
- Base metals and tools thereof
- Automotive accessories
- Plastics and rubber.
Very prospective industries for trade cooperation include environmental protection (e.g., solar energy and electromobility), food processing, advanced agricultural and metallurgical technologies, and cosmetics.
The top imported products from Taiwan to the European Union in 2020:
- Machinery and equipment.
- Base metals and products thereof.
- Transport equipment.
- Plastics, rubber, and articles thereof.
- Optical and photographic apparatus.
The easiest way to find Taiwanese suppliers is to start from business-to-business (B2B) sites. Taiwanese manufacturers advertise on such Chinese platforms as Alibaba or Global Sources. An only-Taiwanese B2B platform is Taiwantrade. Another good idea is to visit trade shows or attend online ones.
Customs Duties on Imports from Taiwan
Payment of customs duties is mandatory when importing from Taiwan. Duties assessed are based on the Cost of goods, Insurance, and Freight to the customs border (CIF) value. VAT is calculated as an applicable percentage of the CIF value and customs duty sum. As for the European Union, you can check the current tariffs in the TARIC system.
When importing from Taiwan to the US, you can check the customs duty tariff in the Harmonized Tariff Schedule. Another important fact is that you need a customs bond to import many product types to the US.
Below, we have prepared a list of sample tariffs for popular items importers imported from Taiwan, based on the TARIC system (tariffs applicable in the US are similar in many cases):
- 0804300090 – fresh pineapples – 5.8%
- 8204120000 – hand-operated spanners and wrenches, adjustable – 1.7%
- 8471300000 – laptops – 0%
- 8518300090 – headphones and earphones – 0%
- 8525809900 – video camera recorders – 0%
- 8528529100 – LCD panels – 0%
- 8541409000 – solar panels – 0%
- 8542900000 – parts of electronic integrated circuits – 0%
- 8708913500 – coolers – 4.5%
- 9005100000 – binoculars – 4.2%.
The duty rate often depends on the product’s material composition and the availability of a given product type in the area of the destination. The majority of electronic equipment and parts has a 0% duty rate.
It is vital to correctly classify your goods according to their composition and destination and find the correct HS code (HTS code for the US) before filling out customs documents.
Ensure that you have a set of accurately issued documents allowing your cargo to pass through customs clearance. The essential import documents include:
- Commercial Invoice issued by the exporter
- Packing List, required when the Commercial Invoice does not specify the net and gross weight
- Freight Bill (Bill of Lading, B/L for sea freight or Air Waybill AWB for air freight) is needed to receive the cargo.
When importing to the US, you will also need an Entry Manifest (CBP Form 7533). A corresponding document in import to the EU would be the Single Administrative Document (SAD).
Keep in mind that import documentation also includes relevant compliance certificates depending on the type of cargo. Most Taiwanese exports are electronics and machinery, so they are often subject to certification. One example is the CE Declaration of Conformity, applicable in the EU. Remember that most of the imported merchandise in the US must have an affixed COO label (Country of Origin).
Is Importing from Taiwan Different from Importing from China?
The European Union and the United States maintain trade relations with Taiwan within the One-China policy. It means that both regions have no formal diplomatic relations with the country as such but do cooperate extensively with Taiwan on many levels. In practice, this translates into almost identical rules for imports from Taiwan and mainland China.
There are, of course, some local differences, such as holidays. It also happens that smaller Taiwanese factories offer competitive prices for products similar to those sold by middlemen in mainland China.
The good news is that Taiwan is not a party to the China-US trade war, which means no additional “China duty” on products imported to the US.
Importing Electronics from Taiwan to the EU and the US – Regulations
Professional importers should become familiar with the regulations governing imports into their region. It is of great importance because it is the importer who is responsible for the compliance of marketed products with standards. If any violations are discovered, the importer might risk serious financial losses.
Many product types frequently imported from Taiwan to the EU are regulated by the New Approach Directives, such as:
- RoHS Directive
- Machinery Directive
- Low Voltage Directive
- Electromagnetic Compatibility Directive
- Radio Equipment Directive.
The New Approach Directives compliance obligation entails CE certification, which is extremely important when importing electronics, apparatus, machinery, and certain tools.
When it comes to electronics compliance in the US, most issues are addressed by the Federal Communications Commission. Compliance requirements include:
- Compliance with the FCC title 47 CFR Part 15
- FCC testing and certification
- Compliance with the Underwriter Laboratories (UL) standards
- UL testing and certification
- Compliance with CPSC (Consumer Product Safety Commission) regulations
- Providing a General Certificate of Conformity (GCC) for certain products.
There are also regional regulations in place in some states and special provisions concerning children’s products, regulated by the Consumer Product Safety Improvement Act.
Taiwanese Business Culture
East Asian business culture is quite different from the Western one. Knowing the basic rules will allow you to build more lasting business relationships. Here are some key principles:
- western partners are expected to be punctual
- it is good to prepare a supply of business cards, as their exchange is very common – they should be presented and received with both hands and never put in the back pocket
- when it comes to the outfit, you should avoid the dominance of one of the following colors: white, black, or red
- when addressing a business partner, it is advisable to use their academic/professional title
- many business issues are discussed over a meal
- is it good to be prepared for an exchange of souvenirs, keeping in mind that in some Asian regions, it is forbidden to gift watches/clocks, umbrellas, sharp tools, items packed in sets of four, and goods manufactured in the recipient’s country.
Transporting Cargo from Taiwan
The main criteria for choosing the mode of transport are the shipment dimensions and the time we expect to receive it. As Taiwan is an island, you can only choose between maritime transportation and airfreight. Besides, some well-known international courier companies offer door-to-door delivery from countries like Taiwan.
The cheapest way to receive cargo from Taiwan is by sea freight – you can use LCL (Less than Container Load) or FCL (Full Container Load). Transit time is about a month. Taiwan has seven international commercial harbors: Anping, Hualien, Kaohsiung, Keelung, Su’ao, Taichung, and Taipei. The Kaohsiung seaport handles the vast majority of cargo.
A much faster method of transportation is airfreight – it takes up to a week. However, it is much more expensive, so it is best suited for small and valuable cargo or fresh foods. Leading airports handling cargo traffic in Taiwan are Taiwan Taoyuan International Airport, located 25 km away from Taipei, and Kaohsiung International Airport.
Verify company from Taiwan
The value of a trustworthy supplier is very high. Selecting the right supplier is key to any business strategy. Before choosing your business partner from Taiwan, you should have due diligence conducted. We can verify a Taiwanese supplier for you – if they have the proper certification, the type of company, and more. Avoid the consequences that could come with sourcing from an unvetted supplier!
Importing from Taiwan – In a Nutshell
- European Union countries and the United States mainly import electronics, automotive parts, metal products, machinery, and apparatus from Taiwan.
- Customs duties on popular Taiwanese exports are quite low and, in many cases, as low as 0%.
- Necessary import documents include a Commercial Invoice, Freight Bill, and Packing List.
- Many of Taiwan’s export goods fall into mandatory CE/FCC certification.