Taipei, Taiwan – Taiwan and the United States have reportedly reached a “general consensus” on a significant trade agreement aimed at reducing tariffs on Taiwanese exports, marking another step in ongoing economic negotiations between the two countries. The announcement comes after months of detailed discussions and aligns with Washington’s broader strategy of encouraging strategic foreign investment in the US.

Overview of the Taiwan-US Trade Deal

Taiwan’s Office of Trade Negotiations confirmed on Tuesday that the two sides had outlined the framework of a deal, though specific details remain under wraps. According to US media reports, the agreement would lower tariffs on Taiwanese exports from 20 percent to 15 percent, in exchange for substantial investment commitments from Taiwan.

“The goal of the US-Taiwan tariff negotiations has always been to achieve reciprocal tariff reductions without stacking tariffs and to obtain preferential treatment under Section 232,” the office stated.

This announcement follows US President Donald Trump’s tariff impositions on Taiwanese goods, which began in April 2025 at 32 percent before being reduced to 20 percent in August 2025 pending further negotiations. The US has previously negotiated similar deals with Japan and South Korea, which agreed to multi-billion-dollar investments in return for tariff reductions.

TSMC’s Role and Strategic Investments

A key element of the deal involves the Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chipmaker. Reports indicate that TSMC will construct at least four new production facilities in Arizona, representing a substantial expansion of its US footprint.

TSMC has already announced plans to invest $100 billion in new fabrication and packaging plants in the United States, bringing its total investment in the country to approximately $165 billion. The expansion aligns with US efforts to reduce reliance on Taiwan’s semiconductor production amid growing geopolitical tensions with China, which claims Taiwan as its territory.

While TSMC’s most advanced chips will continue to be produced in Taiwan, these new US facilities will strengthen the global supply chain and reduce the risk of disruption due to potential regional conflicts or blockades.

Strategic and Economic Implications

The trade agreement underscores the strategic importance of semiconductors in global economics and national security. By incentivizing Taiwan to invest heavily in the US, Washington aims to secure domestic supply chains for critical technologies and mitigate risks posed by geopolitical instability in the Taiwan Strait.

For Taiwan, the deal represents an opportunity to expand its economic influence, strengthen its partnership with the United States, and ensure continued market access for its technology exports. For the US, it reflects a continued effort to leverage tariffs to encourage foreign investment and safeguard strategic industries.

Analysts note that the Taiwan-US trade consensus also signals the growing interdependence of global chip manufacturing and the increasing role of geopolitical considerations in trade negotiations.

Looking Ahead

The formalization of this trade deal is expected in the coming weeks, once both governments finalize the remaining details. TSMC’s expansion in the US, coupled with tariff reductions, is poised to reshape semiconductor supply chains and deepen economic ties between Taiwan and the United States.

Taiwan’s ongoing commitment to maintain advanced production domestically ensures that it retains its technological edge, even as it strengthens economic collaboration with foreign partners.