Taiwanese firms pledge $250B+ in US Chip Investments...

The United States and Taiwan have finalised a landmark trade agreement that slashes tariffs on Taiwanese goods to 15% while securing massive new investments in American semiconductor manufacturing, marking a significant step in reshoring critical technology supply chains amid geopolitical tensions.

The announcement was made on January 15, 2026, by the U.S. Department of Commerce.

CBI News reports that the deal reduces "reciprocal" tariffs on a broad range of Taiwanese exports from the previous 20% level, aligning them with rates applied to partners like Japan, South Korea, and the European Union. In exchange, Taiwanese semiconductor and technology companies led by giants like TSMC have committed to at least $250 billion in direct new investments to expand advanced chip production, artificial intelligence, and energy facilities in the United States. Taiwan will also provide an additional $250 billion in credit guarantees to support these expansions, bringing the total financial commitment to around $500 billion in some reports.

The U.S. Commerce Department hailed the pact as a "historic" move to drive "massive reshoring" of America's semiconductor sector, which has long relied heavily on Taiwan for the world's most advanced chips.

The agreement includes incentives for Taiwanese firms investing in U.S. facilities, such as duty-free or reduced-tariff imports of semiconductors and related equipment up to 2.5 times their planned new capacity during construction.

U.S. Commerce Secretary Howard Lutnick emphasised the strategic goal of bringing a significant portion, potentially up to 40%, of Taiwan's chip supply chain to American soil, bolstering domestic production and reducing vulnerabilities exposed during global shortages.

Taiwan's Vice Premier Cheng Li-chiun, who led the negotiations in Washington, described the deal as paving the way for a closer strategic partnership in AI and high-tech innovation. President Lai Ching-te noted that the lower tariffs would "level the playing field" for Taiwan's non-tech industries as well.

The agreement comes against the backdrop of ongoing U.S. efforts under the Trump administration to use tariffs as leverage for "America First" manufacturing revival, while strengthening alliances in the face of China's claims over Taiwan. Analysts view it as a win for U.S. tech security and supply chain resilience, though it risks heightening tensions with Beijing.

Reactions on social media and markets have been positive, with many highlighting benefits for semiconductor stocks and the broader push for domestic chip production.

This deal underscores the growing importance of semiconductors in global economics and geopolitics, positioning the U.S. and Taiwan as key partners in securing the future of advanced technology.