$500 Billion… US-Taiwan Agree Huge Chip Trade Deal

Confirming what we previewed on Tuesday, the US and Taiwan agreed to a long-sought trade agreement that would lower tariffs on goods from the self-governed island to 15% and see Taiwanese semiconductor companies increase financing for American operations by $500 billion.

While the details are a little murky, duties on Taiwanese shipments would fall from the previous 20% rate – putting them on par with Japan and South Korea, which reached their own agreements last year.

And, as Bloomberg reports, Taiwan’s technology industry would also commit to making at least $250 billion in direct investments to expand advanced semiconductor, energy and artificial intelligence operations in the US.

In addition, Taiwan agreed to provide an additional $250 billion in credit guarantees for further investment in the American semiconductor supply chain.

A White House statement outlining the deal did not specifically mention Taiwan Semiconductor Manufacturing, but the arrangement has clear implications for the company, which is the world’s top producer of AI chips.

Bloomberg reported earlier this week that the accord would call for TSMC to build at least four more chip manufacturing plants in Arizona, adding to the six factories and two advanced packaging facilities it has already promised to open there.

The agreement was announced shortly after a delegation of top Taiwanese officials visited Washington to finalize the deal with President Trump’s representatives.

Taiwanese President Lai Ching-te had indicated he supported Trump’s goal of reindustrializing the US but said American land, electricity and workforce policy reforms were needed so projects could move ahead.