The Trump administration finalized a sweeping trade agreement with Taiwan on Thursday, securing Taipei’s commitment to eliminate or lower 99% of its tariff barriers, according to the Office of the U.S. Trade Representative.
The accord comes as the United States continues to depend heavily on Taiwan for semiconductor production.
Exports of computer chips have contributed to a trade gap of nearly $127 billion in the first 11 months of 2025, based on data from the U.S. Census Bureau.
Under the new arrangement, most Taiwanese exports to the United States will face a 15% tariff, the USTR’s office said. That rate aligns with tariffs applied to other Asia-Pacific trading partners, including Japan and South Korea.
U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick attended the signing ceremony.
The agreement was concluded under the auspices of the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States.
Taiwan’s Vice Premier Li-chiun Cheng and government minister Jen-ni Yang were also present.
“President Trump’s leadership in the Asia-Pacific region continues to generate prosperous trade ties for the United States with important partners across Asia, while further advancing the economic and national security interests of the American people,” Greer said in a statement.
Taiwan’s government said the 15% tariff rate would allow its companies to compete on equal footing with Japan, South Korea and the European Union.
Officials added that the deal “eliminated” the disadvantage created by the absence of a formal free trade agreement between Taiwan and the United States.
The agreement precedes President Donald Trump’s planned visit to China in April and signals closer economic coordination between Washington and Taipei.
Taiwan operates as a self-governed democracy, though China claims the island as its territory and has vowed to annex it by force if necessary.
Beijing bars countries with which it maintains diplomatic relations — including the United States — from establishing formal diplomatic ties with Taipei.
The new trade framework is expected to ease U.S. exports of automobiles, pharmaceuticals and agricultural goods to Taiwan. A central feature of the deal involves Taiwanese investment in semiconductor manufacturing facilities in the United States, a move that could help narrow the trade imbalance.
In a related arrangement, Taiwan pledged $250 billion in investments across U.S. sectors such as semiconductor production, artificial intelligence and energy.
The Taiwanese government also said it would extend up to an additional $250 billion in credit guarantees to support smaller businesses investing in the United States.
Those investment commitments enabled U.S. officials to scale back proposed tariffs from an initial level of up to 32% to 15%.
Taiwan’s government said the trade agreement and accompanying investment plans will be submitted to its legislature for approval.
U.S. officials said the agreement would support the creation of several “world-class” industrial parks aimed at strengthening domestic manufacturing of advanced technologies, including semiconductors. In January, the Commerce Department described the pact as “a historic trade deal that will drive a massive reshoring of America’s semiconductor sector.”
In return, the United States will offer Taiwan preferential consideration regarding potential tariffs that could arise from a Section 232 investigation into semiconductor and chip-equipment imports.
Taiwan Semiconductor Manufacturing Company, or TSMC, is expected to play a leading role in the investment push. The company has committed $165 billion toward U.S. projects, including fabrication plants and a major research and development center designed to strengthen supply chains supporting American artificial intelligence development. Major U.S. technology firms such as Nvidia and AMD depend on TSMC to manufacture their most advanced chips.
Taiwan also emphasized that investment flows would move in both directions. This week, Nvidia signed a land agreement in Taipei to construct a new headquarters office there, underscoring expanding cross-border business ties.
