The agreement seeks to bring a sizable portion of Taiwan’s electronics supply chain to the US. In return, chips from Taiwan will see no or reduced tariffs.<\/b>
\nThe US has reached a trade deal with Taiwan that fends off the threat of huge tariffs on cutting-edge chips from TSMC, the major semiconductor manufacturer for AMD, Apple, and Nvidia.
The deal, announced on Thursday by the Commerce Department, calls for Taiwan\u2019s semiconductor industry to make investments of \u201cat least $250 billion\u201d to build and expand their chip manufacturing in the US. Commerce says the deal will \u201cdrive a massive reshoring of America\u2019s semiconductor sector,\u201d and pave the way for a \u201cfull semiconductor supply chain and ecosystem in the United States\u201d when most chip production currently occurs in Asia.
In return, the Trump administration is planning to exempt Taiwanese companies from paying future tariffs on chips imported into the US. Although Trump\u2019s semiconductor-focused tariffs have been delayed, the White House has still been preparing them through a legal authority called Section 232, which enables the president to tariff specific goods over national security concerns, following an investigation.
Trump previously threatened to impose duties as high as 300% on foreign-made chips, unless the affected companies commit to building new factories in the US. Thursday\u2019s deal reflects his approach. \u201cTaiwanese companies building new US semiconductor capacity may import up to 2.5 times that planned capacity without paying Section 232 duties during the approved construction period, with a lower preferential Section 232 rate for above-quota imports,\u201d Commerce says.
Once the chip factories have been completed in the US, Taiwanese companies \u201cwill still be able to import 1.5 times their new US production capacity without paying Section 232 duties.\u201d
On top of all this, the US says Trump\u2019s „reciprocal tariffs\u201d on Taiwanese goods, first implemented in August, will never total more than 15%. The rate was previously set at 20%.
Taiwan\u2019s TSMC has already been making huge investments to build new fabs in Arizona. This has included an existing $100 billion plan last March for three new fabs. But the company\u2019s most advanced chip manufacturing processes have remained in Taiwan\u2014partly because the island\u2019s government has been blocking the valuable technology from being exported elsewhere.
The Commerce Department\u2019s announcement was thin on details about the semiconductor technology potentially involved. But in an interview with CNBC, Commerce Secretary Howard Lutnick said the White House is including TSMC\u2019s earlier $100 billion investment into the total $250 billion commitment. Still, he expects the chip giant to increase its investments in the US to expand its Arizona fabs even more. Earlier in the day, TSMC reported earnings that said its 2026 capital expenditure budget is expected to reach between $52 billion and $56 billion.
Lutnick also noted the Taiwanese government plans on investing another $250 billion to help smaller Taiwanese companies expand operations in the US. „The objective is to bring 40% of Taiwan’s entire supply chain and production.to America. And here’s the goal: During President Trump’s term“, he added. Other major companies based in Taiwan include Acer, Asus, MSI, and MediaTek along with contract manufacturers Foxconn and Pegatron.<\/p>\n