If I already set up Apple Pay in USA, can I use it when in other countries and will there be any foreign transaction fee? For example, Apple Pay is just beginning to work in Taiwan. 


But can it work if I set up Apply Pay using a USA credit card?
Will there be any foreign transaction fee (of 3% by the credit card)
Same as (2) but what if it is a credit card like Capital One that doesn't have any foreign transaction fee when you use the physical card?
Yes. Assuming the card you linked to Apple Pay allows foreign transactions. 

Once setup you can use an Apple Pay-linked credit card in any country with a contactless payment terminal when they accept your credit card. Your linked card will be charged in the currency of the vendor where you use Apple Pay and you may incur foreign transaction fees on the transactions.

Consult your card holder agreement to determine if your card functions outside of the country of issuance and whether foreign transaction fees will be charged.

Apple Pay is a means of presenting a credit card to complete a transaction. It doesn't replace the credit card and your credit agreement with the card issuing bank. All of that still applies when you use Apple Pay.