Taiwan Urges U.S. Congress to Pass Double-Tax Relief Legislation

On June 18, 2026, Taiwan President Lai Ching-te received a U.S. House delegation –– including Representative Lucy McBath (D-GA), second vice chair of the Congressional Black Caucus (CBC), and Representative Valerie Foushee (D-NC), a member of the caucus –– at the Presidential Office.

During the meeting, Lai called for expanded Taiwan-U.S. cooperation in defense, technology, industry, and artificial intelligence (AI), while also highlighting the need to remove remaining barriers to cross-border investment.

Breaking Down the Double Taxation Barrier

President Lai explicitly called on the U.S. Congress to expedite the passage of U.S.-Taiwan double taxation relief legislation, which he said would reduce cross-border investment barriers and further foster bilateral commercial cooperation.

This push directly aligns with the relevant Senate legislation, the United States-Taiwan Expedited Double-Tax Relief Act (S.199). This bipartisan legislation complements the House version (H.R.33), which overwhelmingly passed the House by a 423–1 vote in January 2025.

Meanwhile, American Chamber of Commerce in Taiwan (AmCham Taiwan) President Carl Wegner announced that he would lead a high-level business delegation to Washington for “door-knock” meetings with U.S. officials on boosting bilateral trade.

Wegner expressed optimism that the long-stalled double-tax relief effort could move further forward in the near future, bolstered by the momentum of the U.S.-Taiwan Agreement on Reciprocal Trade (ART) signed in February 2026.

AI and Semiconductor Pipeline

Against the backdrop of the accelerating AI revolution, eliminating double taxation has become increasingly urgent. Driven by the unprecedented AI boom, two-way trade in goods reached US$256 billion in 2025, making Taiwan the United States’ fourth-largest trading partner (surpassing Japan, Germany, and South Korea).

During the meeting with the U.S. House delegation, President Lai highlighted the newly established U.S.-Taiwan Semiconductor Education Alliance –– an initiative designed to promote collaboration among universities, industry, and government stakeholders to strengthen bilateral semiconductor workforce talent pipelines.

Implications

AmCham’s 2026 Business Climate Survey highlights Taiwan’s vital role in global technology supply chains, with 92% of members planning to maintain or increase investments in Taiwan. The survey also found that 76% of respondents consider a double taxation avoidance agreement important to their business, underscoring the private-sector demand for congressional action.

Separately, AmCham’s 2026 Taiwan White Paper frames Taiwan as a critical partner for U.S. technology supply chains and Indo-Pacific stability, highlighting significant opportunities for U.S.-Taiwan R&D and co-production in drones, robotics, and other asymmetric capabilities.

Given these growing economic bonds, it is essential that the U.S. Senate swiftly pass the United States-Taiwan Expedited Double-Tax Relief Act (S.199) to remove remaining barriers to deeper bilateral investment and cooperation.

Sources:
[1] Focus Taiwan   [2] Taipei Times   [3] S.199 / H.R.33 (United States-Taiwan Expedited Double-Tax Relief Act)   [4] Taipei Times   [5] Office of the U.S. Trade Representative (USTR)   [6] AmCham Taiwan (2026 Taiwan White Paper)   [7] American Institute in Taiwan (AIT)   [8] AmCham Taiwan (2026 Business Climate Survey)

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“Blue Skies for Taiwan Act” Advances Out of Senate Committee as Taiwan Expands Drone Development and Procurement

On June 17, 2026, the U.S. Senate Foreign Relations Committee advanced the bipartisan Blue Skies for Taiwan Act (S.4259). The move brought the bill one step closer to creating a fast-track certification pathway for trusted Taiwanese drone and drone-component manufacturers to integrate into the U.S. Department of Defense’s “Blue UAS” program.

Strengthening Trusted Drone Supply Chains

The legislation would establish a “Blue UAS Working Group” to identify and address regulatory, export-control, and certification barriers that impede Taiwan’s participation in Blue UAS programs. This initiative aims to systematically strengthen trusted, PRC-free drone supply chains while bolstering Taiwan’s indigenous drone production and regional resilience.

This legislation marks a shift toward a reciprocal defense-industrial partnership. By accelerating Taiwanese manufacturers’ integration into Pentagon-vetted networks, the bill would reduce cybersecurity risks and expand the supply of trusted, democratic UAS systems and components available to the United States and its allies.

Taiwan Accelerates Military Drone Expansion

The legislative progress in Washington coincides with the Taiwanese government’s moves to expand investment in its domestic uncrewed systems. On June 18, 2026, Taiwan’s Executive Yuan approved a draft special budget to fund the development and procurement of domestic drones and uncrewed aerial vehicles (UAVs), with a budget ceiling of NT$210 billion (approximately US$6.65 billion) to be allocated through December 2031.

The proposed procurement consists of 1,446 coastal reconnaissance drones, 208,200 coastal attack drones, and 1,320 uncrewed surface vehicles (USVs). This robust procurement, alongside the scheduled launch of a dedicated army drone squadron, reflects Taiwan’s proactive stance and firm commitment to sustaining its buildup of uncrewed systems and enhancing its asymmetric deterrence.

Sources:
[1] Office of Sen. Jeff Merkley   [2] S.4259 (Blue Skies for Taiwan Act)   [3] Taipei Times  [4] Taipei Times