U.S. Secretary of Commerce Howard Lutnick (third from left), U.S. Trade Representative Greer (second from left), and AIT Washington Headquarters Executive Director Ingrid Larson (first from left) with Taiwan Executive Yuan Vice Premier Cheng Li-chun (third from right), Executive Yuan Minister without Portfolio Yang Jen-ni (second from right), and Representative to the United States Yu Ta-wei (first from right).
[People News] The United States and Taiwan announced on Thursday (January 15) that they have reached a large-scale trade agreement that lowers tariffs on Taiwan’s exports to the United States while promoting large-scale investment by Taiwan’s semiconductor industry in the United States.
According to a report by Voice of America, based on information released by the U.S. Department of Commerce, the agreement will reduce tariffs on most products exported from Taiwan to the United States from 20% to 15%; for certain key products, such as generic drugs, aircraft parts, and some natural resources, tariffs will be reduced to zero. The agreement will also set a 15% tariff cap on Taiwan’s exports to the United States of products such as auto parts and lumber.
For Taiwanese chip manufacturers such as TSMC that expand their production scale in the United States, the United States will reduce or exempt tariffs on chips and related equipment imported into the United States. The Taiwan side stated that the United States has committed that if chip tariffs are raised in the future, Taiwan will not be treated less favorably than other economies.
In exchange, Taiwanese companies have pledged to invest US$250 billion in the United States to develop semiconductor, energy, and artificial intelligence capacity, including the US$100 billion investment that TSMC pledged as early as 2025. Taiwan will also provide US$250 billion in credit guarantees to help promote the development of the U.S. domestic semiconductor supply chain.
U.S. officials have long been concerned that the United States relies excessively on overseas manufacturing for advanced chips. Although semiconductors were invented in the United States and much chip design is still done there, the world’s most advanced manufacturing is mainly concentrated in Taiwan.
U.S. Secretary of Commerce Howard Lutnick posted on the social media platform X, stating, “This Taiwan agreement marks the largest semiconductor reshoring commitment in U.S. history. It will drive companies to invest US$250 billion in semiconductor investment, while facilitating US$250 billion in Taiwan government-backed funding to build small and medium-sized semiconductor supply chains in the United States. Combined with this agreement, America’s advanced manufacturing will bring chip production back home, create high-paying jobs, and ensure economic and national security for decades to come.”
In an interview with CNBC, Lutnick said that the U.S. goal is to attract “40% of Taiwan’s semiconductor industry chain” to locate in the United States.
Taiwan President Lai Ching-te also praised the trade agreement reached between the United States and Taiwan. In a post on X, he said that this “landmark agreement reduces tariffs on Taiwanese goods to 15%. Both sides will deepen economic integration in key areas, strengthen high-tech cooperation and two-way investment, and pave the way for building a stronger partnership and creating a more prosperous future.”
The U.S. Department of Commerce said that this is a “major trade agreement,” proving that the Trump administration’s “America First” trade policy has “worked once again.”
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