US and Taiwan Agree on Tariff Reductions for Semiconductor Industry

US and Taiwan Reach Trade Deal on Semiconductor Industry

The US Commerce Department announced a trade deal with Taiwan that will see the island nation invest at least $250 billion in the US semiconductor industry in exchange for reduced tariffs. The agreement aims to strengthen US economic resilience, create high-paying jobs, and bolster national security.

Under the terms of the deal, Taiwan’s semiconductor and technology businesses will establish advanced production capacity in the US, with a projected split of 85-15 between Taiwan and the US by 2030 and 80-20 by 2036. The US has been seeking improved access to Taiwan’s strategic chip industry, which is seen as critical for global digital technology.

As part of the agreement, Washington will reduce its general tariff on imports of Taiwanese goods from 20 percent to 15 percent. Taiwan will also provide credit guarantees for additional investment in the US semiconductor supply chain.

The deal was welcomed by Economic Affairs Minister Kung Ming-hsin, who stated that Taiwan would remain the world’s main semiconductor supplier. Beijing has expressed opposition to the agreement, urging Washington to abide by its one-China principle and opposing any agreements signed between countries with which it has diplomatic relations and the Taiwan region of China.

Source: Al Jazeera