Taiwan has reached a major trade agreement with the United States that links lower tariffs to large scale investments in technology and energy. Under the deal announced late Thursday, Taiwanese semiconductor and technology companies will invest at least $250 billion in the US, while Washington will cut its general tariff on Taiwanese imports from 20% to 15%.
The agreement highlights Washington’s push to secure stronger access to Taiwan’s advanced chip industry, which plays a central role in the global digital economy. President Donald Trump, had earlier announced a 32% tariff on Taiwanese goods during his “Liberation Day” tariff rollout last spring, before reducing it to 20%. The Commerce Department described the new agreement as “historic”, saying it “will strengthen US economic resilience, create high paying jobs and bolster national security”.
Beyond direct investment, Taiwan will also provide at least $250 billion in credit guarantees to support further expansion by its companies across the US semiconductor supply chain. These funds will support the construction and growth of advanced semiconductor, energy and artificial intelligence production and innovation facilities in the US. Despite this expansion, it was made clear that its global leadership in chip manufacturing will remain intact.
Taiwan’s semiconductor sector has long been viewed as a “silicon shield”, seen as both a deterrent to Chinese military action and a strategic incentive for US support. “Based on current planning, Taiwan will still remain the world’s most important producer of AI semiconductors, not only for Taiwanese companies, but globally,” Economic Affairs Minister Kung Ming-hsin, told reporters, according to a news agency. He projected that advanced AI chip production capacity will be split about 85% in Taiwan and 15% in the US by 2030, shifting to 80% and 20% by 2036. China reacted strongly, with its foreign ministry saying it “consistently and resolutely opposes any agreement” between countries that maintain diplomatic relations with Beijing and the Taiwan region, urging Washington to respect the one China principle.
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