Important points
- The United States and Taiwan have reportedly signed a trade agreement that lowers tariffs on Taiwanese products from 20% to 15%, in line with Japan and South Korea.
- Taiwanese semiconductor companies will invest $250 billion directly in their U.S. operations and provide $250 billion in credit guarantees to expand their supply chains.
The United States and Taiwan have reportedly agreed to a landmark trade deal aimed at deepening economic ties and accelerating U.S.-based semiconductor manufacturing.
The White House was scheduled to announce the deal on Thursday, Bloomberg reported. The deal would lower tariffs on Taiwanese imports from 20% to 15% and lift a $500 billion semiconductor financing package aimed at expanding U.S. business.
As part of the agreement, Taiwan’s technology sector will commit $250 billion in direct investment to build advanced semiconductor, energy and AI infrastructure in the United States. An additional $250 billion in credit guarantees will be provided to support continued investment in the U.S. semiconductor supply chain.
The deal puts Taiwan on par with Japan and South Korea, which last year secured similar trade terms with the United States. This includes tariff relief in key areas, including a 15% cap on tariffs on auto parts, lumber, and wood products from Taiwan, and zero tariffs on generic drugs produced in Taiwan.
Taiwanese chipmakers will benefit from phased tariff relief, allowing them to import up to 2.5 times their current production capacity duty-free during construction in the United States. Once operational, quotas will be reduced by 1.5x and overshipment charges will be reduced.
