Taiwan plans to work with the United States to build a “democratic” high-tech supply chain and deepen cooperation in artificial intelligence under a new tariffs agreement signed last week, according to Taipei’s lead negotiator. The deal comes as U.S. President Donald Trump urges Taiwan, a major semiconductor producer with a large U.S. trade surplus, to expand chip manufacturing in America, particularly for AI technologies.
Under the agreement, Taiwanese chipmakers such as TSMC that increase U.S. production will benefit from lower tariffs on semiconductors and related equipment, with some imports allowed duty-free. Broader tariffs on most other Taiwanese exports to the U.S. will be reduced to 15% from 20%.
Taiwanese firms have also pledged $250 billion in new U.S. investment across semiconductors, energy, and AI, alongside an additional $250 billion in credit guarantees to support further expansion. Vice Premier Cheng Li-chiun said the deal is designed to extend Taiwan’s technological strengths abroad without weakening its domestic industry, often described as the island’s economic “sacred mountain.”
The agreement also secures preferential treatment for Taiwan under any future U.S. semiconductor tariffs, highlighting the strategic role of technology cooperation as geopolitical tensions continue to shape global supply chains.
