The US has reduced tariffs on Taiwan-made semiconductors, and Taiwan has promised to bring more chip manufacturing to the US.
The American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the US yesterday (15 January 2026) signed a trade deal that establishes a strategic economic partnership between the US and Taiwan that is expected to strengthen US domestic semiconductor supply chains.
In terms of the deal, Taiwanese semiconductor and technology enterprises will make new, direct investments totaling at least $250-billion to build and expand advanced semiconductor, energy, and artificial intelligence production and innovation capacity in the US.
Taiwan will also provide credit guarantees of at least $250-billion to facilitate additional investment by Taiwanese enterprises, supporting the establishment and expansion of the full semiconductor supply chain and ecosystem in the US.
The US and Taiwan will establish industrial parks in the US to strengthen America’s industrial infrastructure.
At the same time, Taiwan will facilitate US investment in the Taiwanese semiconductor, AI, defense technology, telecommunications and biotechnology industries to expand market access for US companies, and deepen technological collaboration.
The agreement will enhance balanced trade through a predictable tariff framework.
- The US reciprocal tariff rate applied to Taiwanese goods will total no more than 15%.
- The US Section 232 duties applied to Taiwanese auto parts, timber, lumber and wood derivative products will total no more than 15%.
- The US will apply a zero percent reciprocal tariff for generic pharmaceuticals, their generic ingredients, aircraft components, and unavailable natural resources.
- Future Section 232 duties applied to Taiwanese semiconductors will reward Taiwanese semiconductor producers that invest in the United States. Taiwanese companies building new US semiconductor capacity may import up to 2,5-times that planned capacity without paying Section 232 duties during the approved construction period, with a lower preferential Section 232 rate for above-quota imports. Taiwanese companies who have completed new chip production projects in the US will still be able to import 1,5-times their new US production capacity without paying Section 232 duties.