The United States and Taiwan have finalized a new trade agreement aimed at cutting tariffs and boosting Taiwan’s semiconductor exports to the US, a move expected to strengthen supply chains while reshaping regional trade dynamics. The deal provides significant relief to Taiwanese chipmakers, including industry leader TSMC, while encouraging large-scale investment in US technology manufacturing.
Under the agreement, broad tariffs on most Taiwanese exports to the US will be reduced from 20 percent to 15 percent. Specific categories, including generic pharmaceuticals, aircraft components, and unavailable natural resources, will now enjoy a zero percent tariff. Chipmakers that expand production facilities in the US will qualify for lower orduty-freee tariffs on semiconductors and related equipment.
In exchange, Taiwan has pledged 250 billion dollars in investment to expand production of semiconductors, artificial intelligence, and energy technologies in the United States. A significant portion of this includes TSMC’s expansion in Arizona, where the company is already building and enlarging manufacturing facilities. Taiwan will also provide 250 billion dollars in credit guarantees to support further investments.
US officials describe computer chips as a national security priority, noting heavy reliance on overseas manufacturing. The agreement aims to bring a large share of Taiwan’s chip supply chain to American soil. While the deal is expected to benefit global chip suppliers, it may also heighten tensions with China, which continues to claim Taiwan as its territory.
