US says it reached deal with Taiwan to lower tariffs and boost investments | Trump tariffs
The United States said Thursday it signed a deal with Taiwan to increase investment in America by Taiwanese semiconductor and technology companies while reducing tariffs on goods from the democratic island.
The US commerce department said the deal “will lead to a major re-support of America’s semiconductor industry.”
Under the deal, Washington will reduce tariffs on Taiwanese goods to 15% from a 20% “reciprocal” rate aimed at addressing U.S. trade deficits and practices it deems unfair.
Sector-specific tariffs on Taiwanese auto parts, lumber, lumber and wood products will also be capped at 15%, the US commerce department said.
Meanwhile, Taiwanese chip and technology businesses are preparing to make “new, direct investments totaling at least $250 billion” in the United States to build and expand capacity in areas such as advanced semiconductors and artificial intelligence.
Taiwan will also provide “at least $250 billion in loan guarantees to facilitate additional investment by Taiwanese enterprises in the American semiconductor supply chain,” the commerce department added.
No names were mentioned in the ministry’s announcement, but the deal has major implications for Taiwanese chipmaker titan TSMC, the world’s largest maker of microchips used in everything from Apple phones to Nvidia’s cutting-edge AI hardware.
TSMC has purchased land and may expand in Arizona as part of the deal, Commerce Secretary Howard Lutnick said in an interview with CNBC.
“They just purchased hundreds of acres of land adjacent to their property. Now I’m going to let them examine it with their boards and give them time,” he said.
Taiwanese firms setting up new U.S. chip operations will also receive more favorable treatment when it comes to future missions into semiconductors, the commerce department added.
“The goal is to bring 40% of Taiwan’s entire supply chain and production domestically to America,” Lutnick said.
“We will put everything in place so that we become self-sufficient in the capacity to produce semiconductors,” he added.
The agreement came after months of negotiations.
Taiwanese president Lai Ching-te has vowed to increase investment in the United States and increase defense spending as his government tries to reduce US taxes and prevent a negative impact on semiconductor chip exports.
Taiwan is a powerhouse in manufacturing semiconductor chips, which are the lifeblood of the global economy, as well as other electronics.
But Trump has previously accused Taiwan of stealing the US chip industry, and his administration has made clear it wants more of the critical technologies produced on American soil.
Taiwan’s goods trade surplus with the United States was approximately $74 billion in 2024. More than half of its exports to the United States are information and communications technology products, including semiconductors.
