The move, the U.S. says, is designed to bolster domestic production and secure critical supply chains.

Under the terms of the deal, reciprocal tariffs on most Taiwanese goods imported into the U.S. will be reduced from around 20% to roughly 15%, bringing them in line with rates extended to other major Asian trading partners such as Japan and South Korea.

Taiwanese companies that expand semiconductor production or related manufacturing in the U.S. will benefit from even lower tariffs or, in some cases, duty-free imports of key equipment and materials during build-out periods.

A cornerstone of the arrangement is the investment commitment from Taiwanese industry: companies are set to invest at least $250 billion in U.S. semiconductor, energy and AI production, with an additional $250 billion in credit guarantees from Taiwanese authorities to support that investment.

The pact is being framed by officials in Taipei as part of a strategic effort to build a “democratic” high-tech supply chain with the United States, particularly around cutting-edge chips and AI-driven technologies, rather than simply shifting production offshore.

Vice premier Cheng Li-chiun emphasised that the deal supports Taiwan’s high-tech industries in extending their strength abroad while maintaining robust domestic capacity.

The semiconductor deal comes against the backdrop of broader U.S. trade policy, including a separate 25 % global tariff on certain semiconductor imports introduced by the U.S. government. The preferential terms of the Taiwan agreement are designed to mitigate the impact of these broader duties on Taiwanese firms that commit to U.S. manufacturing.

Industry players have already signalled expansion plans consistent with the deal: Taiwanese silicon wafer maker GlobalWafers is preparing a phase-two expansion of its Texas facility, aligned with increased U.S. demand for advanced chip production capacity.

RELATED STORIES

Taiwan positions itself as Washington’s AI partner as TSMC earnings underline strength of chip boom

Rising cyber espionage threat to Taiwan’s semiconductor industry linked to China: research