U.S. Cuts Tariffs to 15% in New Trade Agreement with Taiwan

TLDR

• The United States has reduced tariffs on Taiwan from 20% to 15% under a new trade agreement.
• Taiwan has pledged to remove 99% of its tariff barriers, strengthening trade between the two nations.
• The U.S. Trade Representative confirmed that the 15% tariff rate aligns with other Asia-Pacific trade partners.
• Taiwan plans to invest $250 billion in U.S. industries, including energy, semiconductor chips, and AI technologies.
• Taiwan will also provide $250 billion in credit guarantees to help U.S. companies invest in Taiwanese industries.

The United States has finalized a trade agreement with Taiwan, significantly lowering tariffs. The deal includes a reduction in U.S. tariffs from 20% to 15%. Taiwan has also committed to removing 99% of its tariff barriers, strengthening the economic relationship between the two nations.

The U.S. Trade Representative’s office confirmed that the 15% tariff rate aligns with what the U.S. applies to other trade partners in the Asia-Pacific region. Countries such as South Korea and Japan already benefit from this lower rate. President Trump’s administration continues to shape the economic landscape in the region through agreements like this.

Trade Representative Jamieson Greer emphasized that the U.S.-Taiwan deal plays a vital role in fostering prosperity. Taiwan’s commitment to fair competition, especially in sectors like agriculture, pharmaceuticals, and automotive, creates new trade opportunities. The reduction in tariffs is seen as a move to close the trade imbalance between the two countries.

Taiwan Invests $250 Billion in U.S. Industries

Taiwan has also unveiled plans for a massive investment in the U.S., amounting to $250 billion. The focus will be on sectors such as energy, semiconductor chips, and AI technologies. This deal is expected to stimulate growth in critical industries on both sides of the Pacific.

In addition to direct investments, Taiwan plans to provide $250 billion in credit guarantees. These guarantees will help smaller U.S. companies access capital for investment in Taiwan’s industries. The Taiwanese government aims to submit both the trade agreement and the investment plan to its legislature for approval.

Taiwan’s investments will likely increase bilateral economic ties further. The deal also reflects the growing importance of technology sectors. Semiconductor companies like TSMC are expected to play a key role, with the company committing up to $165 billion in U.S. investments.

Taiwan’s Economic Boom Driven by AI and Export Surge

Taiwan’s economy has experienced rapid growth, driven largely by AI and semiconductor exports. The country’s economy grew by 8.6% last year, its fastest rate in 15 years. Strong demand for semiconductors and AI-related products boosted exports to the U.S. by 78% in 2025.

According to Bank of America economists, Taiwan’s export performance will continue to benefit from global AI investment. As the demand for AI chips rises, Taiwan’s tech industry is expected to maintain its strong revenue and profit growth. However, economists predict that the growth rate may slow slightly in the coming year as Taiwan’s economy builds on its success.

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