TAIPEI (Taiwan News) — Washington on Thursday announced a new trade agreement with Taipei in which tariffs on goods from Taiwan will be lowered to 15% in exchange for Taiwanese firms investing NT$7.89 trillion (US$250 billion) in the US.
The US Commerce Department described the pact as a “historic trade deal that will drive a massive reshoring of America's semiconductor sector," per CNA. The US said it would form a strategic economic partnership with Taiwan, strengthen the US semiconductor supply chain, and ensure US technological and industrial primacy.
Taiwanese semiconductor and technology companies will invest at least NT$7.89 trillion in the US. These investments will focus on building and expanding advanced semiconductor, energy, AI manufacturing, and innovation capacity.
Taiwan will provide NT$7.89 trillion in credit guarantees to support further investments by Taiwanese companies in the US. This will foster the creation and expansion of a full US semiconductor supply chain and ecosystem.
The US and Taiwan will collaborate to build world-class tech parks in the US to enhance American industrial infrastructure. This initiative is meant to position the US as the global hub for next-generation technology, advanced manufacturing, and innovation.
Taiwan will also support US investment in Taiwan's semiconductor, AI, defense tech, telecommunications, and biotech industries. The objective will be to expand US companies’ market access, deepen technological cooperation, and strengthen US leadership in critical and emerging industries.
The department said the deal will promote balanced trade by establishing a predictable tariff structure. Under this framework, US tariffs on Taiwanese goods will not exceed 15%.
Under Section 232 of the Trade Expansion Act, the tariff on Taiwan's automobile parts, lumber, and wood derivative products will be capped at 15%. Generic drugs and their ingredients, aircraft parts, and scarce natural resources will face zero tariffs.
Section 232 duties will reward Taiwanese semiconductor companies that invest in the US. Taiwanese companies building new US semiconductor capacity can import up to 2.5 times the planned capacity duty-free during construction, with a lower Section 232 rate for excess imports.
Taiwanese companies that have completed new chip production projects in the US will be allowed to import up to 1.5 times their new US production capacity without incurring Section 232 duties.
