The United States and Taiwan have officially confirmed a new trade agreement that fixes U.S. tariffs on Taiwanese imports at 15 percent. At the same time, Taiwan has agreed to gradually lower or remove tariffs on most American products.
The deal was announced in Washington on Thursday. It adds more details to an earlier agreement made in January. Back then, the U.S. had reduced tariffs on Taiwanese goods, especially semiconductors, from 20 percent to 15 percent. Now this rate has been finalized.
Under the agreement, Taiwan will also buy a large amount of American goods between 2025 and 2029. This includes about $44 billion worth of liquefied natural gas and crude oil. Taiwan will also purchase over $15 billion in civil aircraft and engines with more than $25 billion in power equipment, generators, and other industrial machinery.
The agreement is of great importance for Taiwan’s economy and industries and that it will help strengthen the cooperation with the United States in the high tech sectors such as semiconductors and artificial intelligence.
-Taiwan’s President Lai Ching-te stated that
The agreement still needs approval from Taiwan’s parliament where the majority is with the opposition parties. So there could still be debate before it becomes fully effective.
Another major part of the deal involves investment and previously the Taiwanese companies had promised to invest $250 billion in the United States while approximately $100 billion of that amount has already been committed by Taiwan Semiconductor Manufacturing Company. These investments are expected to focus on production of chip, energy and advanced technology.
Taiwan will also immediately remove tariffs of up to 26 percent on many U.S. agricultural goods such as beef, dairy and corn. However, some products like pork belly and ham will still face a reduced tariff of 10 percent instead of being removed completely.
The U.S. Trade Representative has stated that the agreement will benefit American farmers, workers and manufacturers while mentioning that it will make the supply chains stronger especially in high-tech industries. Trade between the two sides has increased sharply and in the first eleven months of 2025 the U.S. trade deficit with Taiwan rose significantly and this is mainly due to high imports of advanced AI chips.
The agreement shows closer economic ties between the U.S. and Taiwan especially at a time when the global supply chains and technology industries are becoming are gaining importance.
Source: Reuters