The United States and Taiwan have closed a trade deal, reducing tariffs to 15%, while generic drugs, aircraft components, and natural resources unavailable domestically are subject to a 0% tariff. This is in exchange for a $2.5 billion investment in chips.
On January 16, 2569 at 07.21:XNUMX p.m., Reuters news agency reported that The United States and Taiwan reached a trade agreement on Thursday that will lead to a reduction in import tariffs on many exports from Taiwan. Particularly in the semiconductor industry, this would also boost new investment in U.S. technology industries, amidst the risk of displeasing China.
The agreement is seen as a strengthening of relations between President Donald Trump's administration and Taiwan during a geopolitical sensitive period following increased pressure from China on Taiwan. China views this as part of its own, while Washington tries to avoid a full-blown trade confrontation with Beijing.
Under a lengthy agreement, Taiwanese chip manufacturers, such as Taiwan Semiconductor Manufacturing Company (TSMC), that have expanded production in the United States will face lower tariffs on semiconductors, machinery, and related products imported into the US, with some items potentially exempted from import duties entirely. Meanwhile, general tariffs on other Taiwanese exports to the US will be reduced from 20% to 15%.
US Department of Commerce specify that Generic medicines, aircraft parts, and natural resources that are not domestically available will be subject to a 0% tariff. Furthermore, the United States has pledged that if tariffs on chips are increased in the future, Taiwan will not be treated any worse than other countries, according to information from Taiwan.
In exchange for these terms, Taiwanese companies will invest a total of US$2.5 billion to increase their production capacity in semiconductors, energy, and artificial intelligence in the United States. This includes the $1 billion investment that TSMC announced for 2568, with additional investments to follow in the future, according to U.S. Commerce Secretary Howard Lutnick.
In addition, Taiwan will provide an additional $2.5 billion in credit guarantees to facilitate further investment in the United States.
Lutnik said in an interview with CNBC. that The goal of the agreement is to shift approximately 40% of Taiwan's chip supply chain and manufacturing capacity to the United States, while warning that if companies do not invest in setting up factories in the US, import tariffs could be increased by up to 100%.
Supporting major suppliers in the chip industry.
This expansion of chip production capacity is expected to create business opportunities for TSMC's major suppliers, particularly manufacturers of machinery for the semiconductor industry, such as ASML, Lam Research, and Applied Materials.
Meanwhile, smaller raw material and chemical producers such as Sumitomo Corporation and Qnity Electronics, which were spun off from DuPont, are also likely to benefit. Many of these companies already have manufacturing facilities in Arizona from Intel's large-scale operations and have expanded their plants after TSMC established a production base in the state.
In the capital markets, shares of Nvidia, which relies on TSMC for chip manufacturing, rose more than 2%, while Intel shares edged slightly lower. Shares and equity warrants of ASML, Lam Research, Applied Materials, and Qnity climbed by approximately 4–6%.
The United States views computer chips as a national security issue.
The U.S. government is increasingly dissatisfied with its reliance on semiconductor imports, particularly from Taiwan, which is under pressure from China. Although semiconductors are invented in the U.S. and many chips are still designed domestically, a significant number of advanced chips are manufactured abroad, especially in Taiwan.
Meanwhile, companies like Intel and Samsung Electronics from South Korea are also accelerating the expansion of their production capacity in the United States to mitigate supply chain risks and meet their national technological security needs.
refer : www.reuters.com
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