Easing pressure on chipmakers and pharmaceuticals, the new US-Taiwan pact caps tariffs at 15% and unlocks investment commitments to strengthen America’s semiconductor supply chain.
The United States and Taiwan have reached a trade and investment agreement that caps tariffs on Taiwanese imports at 15%, according to a Commerce Department fact sheet. The deal eases trade tensions while reinforcing cooperation in strategic sectors, including semiconductors and advanced manufacturing.
Under the agreement, the 15% ceiling will apply to reciprocal duties as well as sector-specific tariffs. These include levies on auto parts, timber, lumber and wood-based products.
The Trump administration has also agreed to waive reciprocal tariffs entirely on selected categories, including generic medicines and their ingredients, aircraft components and certain natural resources not available in the US.
The agreement includes targeted relief for Taiwanese semiconductor firms investing in US manufacturing. Companies building chip fabrication plants in the US will be exempt from Section 232 duties on imports equal to up to 2.5 times a facility’s planned production capacity during construction. Imports exceeding that threshold will be subject to a reduced, preferential tariff rate.
Once new US chip plants are operational, Taiwanese firms will be allowed to import up to 1.5 times their new production capacity without Section 232 duties.
However, US officials did not specify when the revised tariff structure will take effect or when the agreement will be formally concluded. The document states that the pact was signed by the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in Washington, which serve as the two sides’ unofficial diplomatic channels.
Taiwanese goods have faced a 20% reciprocal tariff since August 2025, when President Donald Trump introduced country-specific duties through a broad executive order. Those measures are currently under review by the US Supreme Court, with a decision expected in the coming weeks.
Beyond trade measures, the deal outlines major investment commitments. Taiwan has agreed to channel $250 billion in direct investment into US semiconductor, energy and artificial intelligence projects. It will also provide at least $250 billion in credit guarantees to support further expansion of the US semiconductor supply chain.
