US and Taiwan strike trade deal to cut tariffs and hike chip investment
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The news: The US and Taiwan have struck a new trade agreement that would lower tariffs on goods from the island nation to 15% and see Taiwanese semiconductor companies increase financing for US operations by USD500 billion ($747 billion).
The context: The Trump administration released a fact sheet on Friday morning AEDT confirming that duties on Taiwanese shipments would fall from the previous 20% rate, putting them level with Japan and South Korea.
Taiwan’s technology industry would also commit to making at least USD250 billion in direct investments to expand advanced semiconductor, energy and AI operations in the US.
That includes a previous commitment of around USD100 billion by the world's top AI chip maker Taiwan Semiconductor Manufacturing Co.
Taiwan has also agreed to provide an additional USD250 billion in credit guarantees for further investment in the US semiconductor supply chain.
The framework caps sector-specific US tariffs on auto parts, timber, lumber and wood-derived products from Taiwan at 15%. Generic pharmaceuticals made in Taiwan would face no import taxes.
The agreement was announced shortly after a delegation of Taiwanese officials visited Washington to finalise the deal with US counterparts.
The sources: White House fact sheet, Bloomberg
