U.S. and Taiwan reach deal lowering tariffs to 15% and boosting financing for U.S. semiconductor operations
Washington — The U.S. and Taiwan have agreed to a deal that would lower tariffs on goods from Taiwan to no more than 15%, and boost Taiwanese semiconductor companies' financing for U.S. operations by half a trillion dollars, the Trump administration announced Thursday.
The 15% would be a slightly lower rate than the 20% rate imposed under President Trump's so-called "reciprocal tariffs" for most imports from Taiwan. The Department of Commerce announced the agreement Thursday, saying Taiwanese semiconductor and tech companies will make new investments totaling at least $250 billion to promote energy, AI and innovation in the U.S., and Taiwan will offer credit guarantees of at least $250 billion to expand the chip supply chain in the U.S. The Trump administration sees semiconductor chips as a critical component to future innovation, and to competing with China.
The Commerce Department, led by Secretary Howard Lutnick, didn't say which companies are expected to invest in the U.S. But Taiwan produces the majority of the world's semiconductor chips — and the most advanced chips. Taiwan Semiconductor Manufacturing Company (TSMC) is easily the largest semiconductor producer in the world, dwarfing its competitors.
Taiwanese companies investing in new chip manufacturing in the U.S. will be able to avoid tariffs on some imports. The U.S. won't apply tariffs for generic pharmaceuticals, aircraft components and unavailable natural resources, the Commerce Department says.
The deal was announced ahead of the Supreme Court's highly anticipated decision on whether the president can unilaterally levy tariffs on countries' imports.