US and Taiwan sign deal to lower tariffs and boost investment

The US said it signed an agreement to cut tariffs on Taiwanese goods to 15% and Taiwanese chip and tech firms pledged at least $250 billion in new U.S. investments.

The United States said it has signed an agreement with Taiwan to reduce tariffs on goods from the island and to encourage larger Taiwanese investment in U.S. semiconductor and technology capacity. The US Commerce Department described the deal as supporting a reshoring of the U.S. semiconductor sector. The agreement sets a reciprocal tariff cap of 15% for Taiwanese goods and links tariff changes to commitments by Taiwanese firms. Officials reported that Taiwanese companies pledged substantial new investment and that Taiwan will provide credit guarantees to support more investment into the U.S. supply chain. Key points: - The US will lower tariffs on Taiwanese goods to 15%, down from a previously applied 20% reciprocal rate, the Commerce Department said. - Sector-specific tariffs on Taiwanese auto parts, timber, lumber and wood products will be capped at 15%. - Taiwanese chip and technology firms are reported to have pledged at least $250 billion in new, direct investments in the United States to expand capacity in advanced semiconductors and artificial intelligence. - Taiwan is reported to provide credit guarantees of at least $250 billion to facilitate additional investment by Taiwanese enterprises into the U.S. semiconductor supply chain. - The Commerce Department did not name companies in its announcement, but the deal was described as having implications for major Taiwanese chipmakers; Commerce Secretary Howard Lutnick said in an interview that TSMC had purchased adjacent land in Arizona that could be used for expansion. - The announcement included an objective, as stated by the Commerce Department, of bringing roughly 40% of Taiwan’s supply chain and production capacity into the United States. Summary: The agreement is presented as a combined trade and investment package intended to lower certain tariffs and attract major Taiwanese investment into U.S. semiconductor and tech capacity. It ties tariff reductions to reported pledges of at least $250 billion in new direct investments and $250 billion in credit guarantees from Taiwan. Specific company commitments, detailed timelines and formal implementation steps were not provided. Undetermined at this time.