U.S. and Taiwan Strike Major Semiconductor Chips Trade and Investment Deal

• Taiwan and the U.S. agreed to reduce reciprocal tariffs on a broad range of Taiwanese exports, lowering the rate from 20% to 15%. • Certain products such as generic pharmaceuticals, aircraft components, and select natural resources will be exempt from reciprocal tariffs. • Taiwanese companies that expand semiconductor production operations in the U.S. can benefit from preferential tariff treatment. • These tariff adjustments are designed to make bilateral commerce more competitive and support technology supply chain integration.

• Taiwanese semiconductor and technology firms committed to making **at least $250 billion in direct investment** to build and expand manufacturing and innovation capacity in the United States, including sectors like semiconductors, artificial intelligence, and energy. • Taiwan also pledged to provide **credit guarantees of an additional $250 billion** to facilitate further investment by Taiwanese companies and support the development of industrial ecosystems. • These investments aim to strengthen U.S. domestic manufacturing capacity and foster technology clusters across key states. • Chipmakers such as TSMC are expected to accelerate construction of U.S. facilities, including advanced packaging and fabrication plants.

• The deal is seen as a major boost for the U.S. semiconductor supply chain, potentially creating jobs and encouraging deeper technology collaboration. • It may generate greater demand for equipment and materials from suppliers involved in chipmaking and related industries. • By lowering trade barriers and encouraging investment, the partnership seeks to reduce supply chain vulnerabilities and enhance competitiveness against global rivals. • Observers note that the agreement could heighten geopolitical tensions, particularly with China, which views Taiwan as part of its territory.