Taiwan and the United States have formally signed the "Taiwan-US Reciprocal Trade Agreement (ART)," which establishes that US tariffs on Taiwanese goods will be reduced to 15% and will not be cumulative. At the same time, Taiwan has pledged to invest $250 billion in the US semiconductor industry. This agreement is seen as a significant step forward against the backdrop of supply chain restructuring and geopolitical competition, impacting not only Taiwan's export competitiveness but also the global semiconductor industry and energy procurement structures.
The US tariffs on Taiwan have been reduced to 15%, bringing Taiwan back to the same level as its allies.
According to the Financial Times , the agreement stipulates that the United States will impose a 15% tariff on Taiwanese imports, which will not be combined with existing Most Favored Nation (MFN) tariffs, representing a significant reduction from the previous maximum tariff of over 35%. This move puts Taiwan on the same tariff level as major trading partners such as Japan and South Korea, eliminating the competitive disadvantage previously caused by high tariffs.
At the same time, the U.S. also pledged to provide tariff exemptions and most-favored-nation treatment based on Section 232 for 2,072 products imported into the U.S., including certain agricultural products, generic drugs, aerospace components, and natural resource products that are scarce in the U.S.
( Taiwan-US trade agreement finalized! $500 billion in investment in exchange for 15% tariffs )
$250 billion in chip investment in the US to strengthen supply chain security
As part of the agreement, Taiwan will invest $250 billion in the U.S. chip industry. Furthermore, the agreement includes provisions for supply chain security cooperation. The U.S. negotiating team, led by U.S. Trade Representative Jamieson Greer, pointed out that cooperation will help enhance the resilience of the high-tech supply chain, reduce tariffs and non-tariff barriers, and decrease dependence on other regions, aligning with the U.S. policy direction of promoting the localization of the semiconductor supply chain and strengthening manufacturing investment in recent years.
Vice Premier Cheng Li-chun stated that this marks the formal completion of a reciprocal trade agreement between Taiwan and the United States, following the signing of the Investment MOU with the US on January 15th. This not only establishes a strategic partnership between Taiwan and the US but also strengthens export controls on high-tech products to build a reliable supply chain.
Taiwan pledges to expand procurement; details of tariff reductions to be seen.
The agreement also outlines several of Taiwan's procurement and tariff reduction commitments to the United States, including a major spending plan for the next three years:
$44.4 billion invested in purchasing liquefied natural gas and crude oil
$15.2 billion invested in purchasing civilian aircraft and engines
$25.2 billion invested in purchasing power equipment
In terms of affected industries, automobiles and auto parts, chemicals, machinery and equipment, health foods, and some agricultural products have all received significant tariff reductions. Within the agriculture and food sector, Taiwan will maintain tariffs on 27 items crucial to food security, including rice, garlic, and some shellfish products; tariffs on 15 pork products will be reduced annually; and for US beef, imports of ground meat and some offal will be permitted, but sensitive parts with concerns about ractopamine contamination will remain prohibited.
Industrial and economic impacts: From tariff pressures to supply chain alliances
According to estimates by Liberty Times , approximately 2,072 products exported to the US received tariff exemptions, covering orchids, tea, communication equipment, and lithium batteries, accounting for about 36% of the total value of exports to the US. Meanwhile, industries such as semiconductors, automobiles, and aerospace components also received most-favored-nation treatment under Section 232 of the US tariff law.
Overall, this agreement is seen as a strategic arrangement against the backdrop of trade frictions and supply chain restructuring. Taiwan exchanges investment and procurement for tariff stability and a strengthened industrial position, while the United States consolidates the security of its high-tech supply chain through financial and market commitments.
This article, titled "Taiwan and the US Sign Trade Agreement: Tariffs Reduced to 15%, $250 Billion Investment in the US Chip Industry," first appeared on ABMedia ABMedia .
