US says it reached deal with Taiwan to lower tariffs and boost investments

"The agreement, the US commerce department said, will drive a massive reshoring of America's semiconductor sector. Under the deal, Washington will lower tariffs on Taiwanese goods to 15% , down from a 20% reciprocal rate meant to address US trade deficits and practices it deems unfair. Sector-specific tariffs on Taiwanese auto parts, timber, lumber and wood products will also be capped at 15%, the US commerce department said."

"Meanwhile, Taiwanese chip and tech businesses are set to make new, direct investments totaling at least $250bn in the US to build and expand capacity in areas like advanced semiconductors and artificial intelligence. Taiwan will also provide credit guarantees of at least $250bn to facilitate additional investment by Taiwanese enterprises, into the American semiconductor supply chain, the commerce department added."

"Taiwanese firms building new US chip operations will also be treated more favorably when it comes to future duties on semiconductors, the commerce department added. The objective is to bring 40% of Taiwan's entire supply chain and production, to domestically bring it into America, Lutnick said. We're going to bring it all over, so we become self-sufficient in the capacity of building semiconductors, he added."

The US and Taiwan agreed to lower tariffs on Taiwanese goods to 15%, reducing a previous 20% reciprocal rate and capping sector-specific tariffs for auto parts, timber, lumber and wood products. Taiwanese chip and tech companies will commit at least $250bn in direct investments to build and expand capacity in advanced semiconductors and artificial intelligence across the US. Taiwan will provide at least $250bn in credit guarantees to support additional Taiwanese investment into the American semiconductor supply chain. The deal offers favorable treatment on future semiconductor duties for firms building US operations and targets bringing 40% of Taiwan's supply chain and production to the United States, with major chipmakers such as TSMC indicated as likely participants and potential Arizona expansion noted.

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