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U.S.-Taiwan deal features 15 percent 'reciprocal' tariff, direct Taiwan investments totaling $250B

Published: 16 Jan. 2026, 09:30 Updated: 16 Jan. 2026, 12:48

The TSMC logo is displayed at its fabrication plant in Kaohsiung, Taiwan, on June 7. [REUTERS/YONHAP]

The United States and Taiwan signed a trade and investment agreement on Thursday, featuring a reduced U.S. "reciprocal" tariff on Taiwanese products and Taiwanese enterprises' commitment to making new, direct investments totaling $250 billion in the United States, the Commerce Department said.

In a fact sheet, the department said that the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States signed the deal, which it said would establish a strategic economic partnership to "decisively" strengthen U.S. domestic semiconductor supply chains.

Under the deal, the United States is to lower its country-specific tariffs on Taiwanese goods to 15 percent — the same rate as those on Korean and Japanese products — from 20 percent.

In return, 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 United States, the department said.

The agreement also includes Taiwan's pledge to provide credit guarantees of at least $250 billion to facilitate additional investment by Taiwanese enterprises, supporting the establishment and expansion of the entire chip supply chain in the United States.

Under their respective deals with U.S. President Donald Trump's administration last year, Korea and Japan have committed to investing $350 billion and $550 billion in the United States, respectively.

Flags of Taiwan are seen on a bridge in Taipei on Dec. 18, 2025. [AFP/YONHAP]

The U.S.-Taiwan agreement also states that sector-specific tariffs applied to Taiwanese auto parts, timber, lumber and wood-derivative products will total no more than 15 percent.

Trump rolled out those industrywide tariffs, invoking Section 232 of the Trade Expansion Act of 1962, a law that provides the president with the authority to adjust imports into the U.S. when he determines they threaten to impair national security.

The fact sheet pointed out that future Section 232 duties applied to Taiwanese semiconductors will benefit Taiwanese semiconductor producers that invest in the United States.

Taiwanese companies building new U.S. semiconductor capacity may import up to 2.5 times that planned capacity without paying sectoral duties during the approved construction period, the fact sheet said.

Taiwanese companies that have completed new chip production projects in the United States will still be able to import 1.5 times their new U.S. production capacity without paying sectoral duties.

"This unprecedented commitment will strengthen U.S. economic resilience, create high-paying jobs and bolster national security," the department said.

Yonhap