Bloomberg — The United States and Taiwan finalized a trade agreement to reduce tariffs, boost market access for American products in Asia, and funnel billions of dollars into American energy and technology projects.
Under the terms of the agreement announced Thursday in Washington, Taiwan agrees to buy liquefied natural gas and crude oil from the US worth more than $44 billion and to further open its market to American products, including meat, dairy, wheat, medical products and automobiles.
Taipei also pledges to buy about $15 billion in American civilian aircraft and parts and invest about $25 billion in power generation equipment by 2029.
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The signing formalizes an agreement that Washington and Taipei announced in January by which They would reduce tariffs on goods from the self-governed island from 20% to 15%. There are exemptions for generic pharmaceuticals, chips and smartphones, which President Donald Trump’s administration has investigated for possible future levies.
The average tariff rate on Taiwanese exports to the US will fall to around 12.3% from 35.8% when reciprocal tariffs first took effect in April last year, Vice Premier Cheng Li-chiun said at a briefing in Washington.
The proportion of exports to the US subject to reciprocal tariffs will also be reduced from 24% to 15.5%according to Cheng. The remaining exports, the subject of US investigations, will be eligible for preferential tariff treatment going forward.
Taiwan will also allow imports of ground beef and certain offal, and align its rules on maximum residue limits for ractopamine in beef products. beef and pork with international standards.
“The Reciprocal Trade Agreement with Taiwan will eliminate tariff and non-tariff barriers facing US exports to Taiwan, encouraging opportunities for American farmers, ranchers, fishermen, workers, small businesses and manufacturers“U.S. Trade Representative Jamieson Greer said in a statement. “This Agreement also builds on our long-standing economic and trade relationship with Taiwan and will significantly improve the resilience of our supply chains, especially in high-tech sectors.”
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Still, uncertainty remains over Taiwan’s promise to provide financing and investment for American chip manufacturing. The document lacks significant new details about how that money would be spent.
The autonomous island initially committed to provide US$250 billion in direct investments to expand advanced semiconductor, energy and artificial intelligence operations in the US. plus another $250 billion in government loan guarantees to boost the US chip supply chain.
In exchange, Taiwanese companies would be allowed to ship a fixed number of semiconductor chips to the U.S. tariff-free as U.S. manufacturing capacity increases. A fact sheet released Tuesday said Taiwan would receive “preferential treatment” against future tariffs on U.S. chips or other remedial measures.
The US has also said it would expand investments in key Taiwanese industries –including semiconductors, AI, defense and biotechnology-, according to a January statement from the Taiwan government.
The democracy that China calls its own has benefited greatly from the global rise of artificial intelligence in recent years. Demand for chips to fuel emerging technology drove Taiwan’s economy to expand 8.6% last year, its fastest pace since 2010.
The deal has broad implications for Taiwan Semiconductor Manufacturing Co (TSM), Asia’s most valuable company. US Commerce Secretary Howard Lutnick has said he expects “huge” investments from the chipmaker, which last year pledged $100 billion in US projects.
Trump has prioritized restoring domestic semiconductor production, calling it critical to economic and national security. The goal could run into obstacles going forward.
Lutnick has said his goal is to bring 40% of Taiwan’s supply chain and chip production capacity to the US.a goal that Taiwanese officials have called “impossible.”
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Taiwan’s semiconductor industry has long been nicknamed the island’s “silicon shield,” as it produces about 90% of the most advanced chips in the worldwhich power everything from spaceships to smartphones. That position has led some in Taipei to worry that offshoring production capacity to the US – the island’s main military backer – could weaken Washington’s incentive to defend the island in the event of a Chinese invasion.
China has stepped up political and military pressure on Taiwan in recent years in a bid to reinforce its stance that the island is part of its territory. Trump, who is scheduled to meet with Chinese President Xi Jinping in April, has sought to ease disagreements with Beijing over trade, Taiwan and other issues. But the Chinese government presented a recent conversation between the two presidents about Taiwan in controversial terms.
The tariff deal now requires approval from Taiwan’s legislative assembly. The opposition Kuomintang, which holds the majority with a smaller allied party, has criticized the negotiations, saying they have lacked transparency. The party has also expressed concerns about the impact on local pork producers and food safety issues related to feed additives in American pork and beef.
The Trump administration also announced Thursday that it reached a framework agreement with North Macedonia for the country to eliminate customs tariffs on all American industrial and agricultural goods. The US will maintain its 15% tariff on North Macedonian products but will identify some goods that will be exempt from the levy. The two countries are also planning additional talks to reduce trade barriers. on agricultural products and strengthen security cooperation.
With the collaboration of Philip Glamann.
Read more at Bloomberg.com
date: 2026-02-13 01:36:00
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