The US and Taiwan clinched a trade deal on Thursday
that cuts tariffs on many of the tech powerhouses exports
. Under the deal, Taiwanese chip makers like TSMC
, which are expanding US production, will be charged
a lower tariff on semiconductors or related equipment that they
ship to the country. They will also be allowed
to import some duty-free. Broad tariffs that apply to
most other Taiwanese exports to the US will fall from
20% to 15%. The US Commerce Department said generic
pharmaceuticals, aircraft components, and unavailable natural resources would
face a 0% tariff. Taiwan said the US also
promised that it would be treated no worse than anyone
else should ship tariffs be increased later. In exchange
, Taiwanese companies will invest$250 billion in semiconductors,
energy, and artificial intelligence in the US. That
includes$100 billion already committed by TSMC in 2025,
with more to come, according to Commerce Secretary Howard
Lutnick. The Trump administration said Taiwan would also guarantee
an additional$250 billion in credit to facilitate further investment
. At a press conference, Vice Premier Chang Lee-hun
said Taiwan aimed to be a strategic AI partner for
the US. In this round of negotiations, we
also promoted two-way. Tech investment between Taiwan and the
United States. We hope that in the future,
both sides can become close strategic partners in AI.
So aside from the previously mentioned Taiwan model for expanding
investment in the US, the US side also committed
through this investment MOU to establishing a mechanism for two-way
investment to expand investment in Taiwan. The deal deepens
the Trump administration's ties with Taipei. It comes at
a critical time as China ratchets up pressure on the
island, which it views as a renegade province.
And while Washington works to avoid an all-out trade war
with Beijing, shares in TSMC rose 3% to record
highs on Friday, further boosted by forecast smashing earnings
the day before.