US reaches trade deal with Taiwan cutting most tariff barriers to 15%

US reaches a trade deal with Taiwan cutting most tariff barriers to 15%

The Trump administration announced a reciprocal trade agreement with Taiwan on Thursday that, the U.S. Trade Representative said, would remove or reduce 99% of Taiwan’s tariff barriers. Under the deal, Taiwan would lower tariffs on most of its exports to the United States, with most products taxed at a 15% rate.

USTR said the 15% tariff rate matches what the U.S. applies to other Asia-Pacific trading partners such as Japan and South Korea. The agreement arrived as the U.S. remains heavily reliant on Taiwan for computer-chip production, with exports from Taiwan contributing to a trade imbalance of nearly $127 billion during the first 11 months of 2025, according to the U.S. Census Bureau.

The signing took place under the auspices of the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States. U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick attended on the U.S. side, while Taiwan’s Vice Premier Li-chiun Cheng and government minister Jen-ni Yang attended for Taiwan.

Greer said in a statement that President Trump’s leadership in the Asia-Pacific continues to generate “prosperous trade ties for the United States” while advancing the economic and national security interests of the American people. In a separate statement, Taiwan said the tariff rate set in the agreement would let its companies compete on a “level field” with Japan, South Korea, and the European Union, and that the agreement “eliminated” disadvantages from the lack of a free trade agreement between Taiwan and the U.S.

The deal also came ahead of Trump’s planned visit to China in April, with U.S. officials describing the agreement as part of deepening economic ties between the U.S. and Taiwan. Taiwan’s Vice Premier Cheng said Taiwan hoped the deal would make it a strategic partner with the U.S. “so as to jointly consolidate the democratic camp’s leading position in high technology.”

At the same time, Taiwan said the agreement would make it easier for the U.S. to sell autos, pharmaceutical drugs, and food products in Taiwan, while the “critical component” could be Taiwanese companies investing in U.S. computer-chip production. Taiwan separately described a related package in which it would invest $250 billion in U.S. industries including computer chips, artificial intelligence applications, and energy, and provide up to an additional $250 billion in credit guarantees aimed at smaller businesses.

Taiwan said those investments helped enable the U.S. to reduce planned tariffs from as much as 32% to 15%. The Taiwanese government said it would submit the reciprocal trade deal and the investment plans to its legislature for approval.

In Taipei, President Lai Ching-te told reporters that Taiwan agreed to reduce tariffs on imports from the U.S. but stressed that the rate on 93 items would remain unchanged to protect agriculture and industrial sectors such as rice farming. The U.S. side said the deal would help create “world-class” industrial parks in America to build domestic manufacturing of advanced technologies, and cited a description by the Commerce Department in January of the effort as “a historic trade deal” driving “a massive reshoring” of the semiconductor sector.

The agreement also included tradeoffs tied to potential U.S. tariffs from a Section 232 investigation into computer chips and semiconductor manufacturing equipment. U.S. officials said the U.S. would give Taiwan preferential treatment regarding those possible tariffs.

The chipmaking company TSMC was expected to be a key investor, with a commitment to $165 billion in investments in the U.S. that includes fabrication plants and a major research and development center intended to build a supply chain for U.S. artificial intelligence ambitions. Lai said when asked whether investing in the U.S. would endanger Taiwan’s most advanced industries that “as long as their R&D centers are in Taiwan, their advanced manufacturing processes are in Taiwan and their largest production volume is in Taiwan, Taiwan can continue to develop steadily.”

Taiwan said the investments would be two-way, including U.S. companies investing in key Taiwanese industries; it noted that Nvidia signed a land deal in Taipei to build a headquarters office there.