Trump administration reaches a trade deal to lower Taiwan’s tariff barriers

WASHINGTON– The Trump administration reached a trade deal with Taiwan on Thursday, with Taiwan agreeing to remove or reduce 99% of its tariff barriers, the office of the U.S. Trade Representative said.

The deal comes as the United States remains dependent on Taiwan for its production of computer chips, the export of which contributed to a trade imbalance of nearly $127 billion in the first 11 months of 2025, according to the Census Bureau.

Most Taiwanese exports to the United States will be taxed at a rate of 15 percent, the USTR office said. The 15% rate is the same as that imposed on other US trading partners in the Asia-Pacific region, such as Japan and South Korea.

Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick attended the signing of the reciprocity agreement, which took place under the auspices of the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States. Taiwanese Deputy Prime Minister Li-chiun Cheng and Government Minister Jen-ni Yang were also present at the signing.

“President Trump’s leadership in the Asia-Pacific region continues to generate prosperous trade relationships for the United States with important partners across Asia, while advancing the economic and national security interests of the American people,” Greer said in a statement.

Taiwan’s government said in a statement that the tariff rate set in the deal allows its companies to compete on an equal footing with Japan, South Korea and the European Union. He also said the deal “eliminates” the disadvantage of the lack of a free trade agreement between Taiwan and the United States.

The agreement comes ahead of President Donald Trump’s planned visit to China in April and suggests a deepening economic relationship between the United States and Taiwan.

Taiwan is a self-governing democracy that China claims as its own territory, which can be annexed by force if necessary. Beijing bans all countries with which it has diplomatic relations – including the United States – from maintaining formal ties with Taipei.

Under the deal, Taiwan will invest $250 billion in U.S. industries, such as computer chips, artificial intelligence applications and energy. The Taiwanese government says it will provide up to $250 billion more in credit guarantees to help small businesses invest in the United States.

The deal would make it easier for the United States to sell automobiles, medicine and food to Taiwan. But the crucial element could be for Taiwanese companies to invest in computer chip production in the United States, which could help ease the trade imbalance.

These investments allowed the United States to reduce its planned tariffs from 32% initially to 15%.

Taiwan’s government said it would submit the deal and investment plans to its legislature for approval.

The US side said the deal with Taiwan would help create several “world-class” industrial parks in America to help develop domestic manufacturing of advanced technologies such as chips. The Commerce Department described it in January as “a historic trade deal that will result in a massive reshoring of the U.S. semiconductor industry.”

In exchange, the United States would provide preferential treatment to Taiwan regarding potential tariffs arising from a Section 232 investigation into the importation of computer chips and semiconductor manufacturing equipment.

TSMC, the chip manufacturing giant, is expected to be the main investor. It pledged to invest $165 billion in the United States, including in manufacturing plants, but also in a major research and development center that would help build a supply chain capable of supporting American ambitions in artificial intelligence. Large American technology companies such as Nvidia and AMD rely on TSMC to manufacture highly advanced chips.

Taiwan also said investments would be two-way, with U.S. companies also investing in key Taiwanese industries. Nvidia signed a land deal in Taipei this week to build its headquarters there.