The United States said on Thursday that it had reached an agreement with Taiwan to lower tariffs on imports from the island while encouraging greater investment by Taiwanese semiconductor and technology firms in the U.S.
According to the U.S. Commerce Department, the agreement will spur a major ‘reshoring of America’s semiconductor industry.’ Under the deal, Washington will cut tariffs on Taiwanese goods to 15%, down from a 20% reciprocal rate, to offset trade deficits and practices the U.S. considers unfair.
The Department further noted that tariffs on Taiwanese auto parts, timber, lumber, and wood products will be capped at 15%. At the same time, Taiwanese chip and technology companies plan to make new direct investments of at least $250 billion in the U.S. to expand and build capacity in areas such as advanced semiconductors and artificial intelligence.
Additionally, Taiwan will provide ‘credit guarantees of at least $250 billion’ to support further investment by Taiwanese firms in the American semiconductor supply chain.
Taiwan’s Vice Premier, Cheng Li-chiun, who represented Taipei in the talks, described the deal as mutually beneficial and said it would also promote American investment in Taiwan.
Cheng emphasized that the investment plan is being led by companies rather than the government and that Taiwanese firms will continue to invest domestically.
The Commerce Department added that Taiwanese companies establishing new chip operations in the U.S. will receive more favorable treatment regarding future semiconductor tariffs.
“The objective is to bring 40% of Taiwan’s entire supply chain and production to domestically bring it into America,” said Commerce Secretary Howard Lutnick.
Taiwanese President Lai Ching-te had pledged to boost investment in the United States and raise defense spending as part of efforts to reduce American tariffs and protect the country’s semiconductor exports.
Taiwan is a major hub for semiconductor production, a critical component of the global economy, along with other electronics.
In 2024, its trade surplus with the United States reached roughly $74 billion, with more than half of its exports consisting of information and communications technology products, including semiconductors.
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