According to a statement made on Tuesday by Taipei’s top negotiator in the talks, Taiwan intends to establish a strategic AI partnership and establish a “democratic” high-tech supply chain with the United States as part of the new tariffs agreement it reached with Washington last week. U.S. The major semiconductor manufacturer, which has a significant trade surplus with the United States, has been pressured by President Donald Trump to invest more in the United States, particularly in AI-powered chips.
Under the terms of the long-negotiated deal, chipmakers like TSMC (2330. TW), opens a new tab that as they increase their production in the United States, they will be able to import some items duty-free and incur a lower tariff on semiconductors or related manufacturing equipment and products.
Broad tariffs that apply to most other Taiwanese exports to the U.S. will fall from 20% to 15%.
Additionally, Taiwan will guarantee an additional $250 billion in credit to facilitate additional investment, and Taiwan will invest $250 billion to boost semiconductor, energy, and artificial intelligence production in the United States. Vice Premier Cheng Li-chiun told reporters in Taipei that the deal was not about depleting Taiwan’s chip industry, which is so crucial to the economy that it is frequently referred to as the “sacred mountain protecting the country.”
“This is not supply-chain relocation; rather, it is support for Taiwan’s high-tech industries to extend their strength abroad – through addition, and even multiplication – to expand a strong international footprint in the United States,” she said.
INVESTMENTS BY CHIPMAKERS
During the approved construction period, chipmakers expanding in the United States will be able to import semiconductors and wafers up to 2.5 times their new capacity without incurring additional tariffs under the terms of the agreement. Preferential treatment would apply to chips that exceed that quota.
Cheng stated that Taiwan has secured prior preferential treatment under any subsequent Section 232 measures pertaining to semiconductors, which are the subject of an ongoing U.S. national security investigation into imports of crucial goods such as pharmaceuticals and chips.
“In terms of the actual semiconductor tariff that will be imposed in the future under Section 232, Cheng stated, “but this remains undecided” Secretary of Commerce Lutnick recently mentioned a possible rate of one hundred percent.
“We have ensured that the U.S. will grant Taiwan the most favourable treatment, including zero tariffs within the quota and preferential tariffs even outside the quota,” “under any future tariff scenario.” In an interview with CNBC last week, U.S. According to Commerce Secretary Howard Lutnick, a tariff of at least one hundred percent is likely if businesses do not construct in the United States.
“In the past we said, ‘Taiwan can help’,” Cheng added, referring to Taiwan’s past efforts to help the international community during the COVID pandemic and other crises.
“We hope in the future it will be “Taiwan-U.S. can lead,’ with the two sides joining forces and, under the wave of AI, working together to build a high-tech supply chain for the democratic camp. This is our long-term goal.” Despite the absence of formal diplomatic ties, the United States is Taiwan’s most significant backer and arms supplier. The democratically governed island is Beijing’s and Beijing has not shied away from using force to accomplish its objectives.
