Press Release:

The US-Taiwan Business Council Welcomes Announcement of New U.S.-Taiwan Trade Deal

(Arlington, Virginia, January 15, 2026)

The US-Taiwan Business Council (USTBC) today welcomed the announcement by the U.S. Department of Commerce of a new trade deal between the United States and Taiwan that would reduce Taiwan baseline tariffs from 20% to 15% and expand investment in the U.S. by Taiwan semiconductor and technology companies. The new tariff level matches the percentages reached in deals signed with Japan and South Korea.

For this agreement to fully maximize its potential, it is critical that the U.S. Congress pass the U.S.-Taiwan avoidance of double-taxation agreement now. The current taxation environment is a massive disincentive to two-way capital deployment. USTBC calls on Congress to pass this legislation in this session, as it would benefit both American and Taiwan workers and companies, as well as bolstering the overall interests of both sides.

The American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office in the United States (TECRO) signed the new trade deal after six rounds of bilateral talks beginning in April 2025. The deal reduces reciprocal tariffs for Taiwan goods to no more than 15%, and applies a zero percent reciprocal tariff for generic pharmaceuticals, their generic ingredients, aircraft components, and unavailable natural resources. The deal also indicates that any Section 232 duties applied to Taiwan semiconductors in the future will reward producers that invest in the United States.

As part of the deal, Taiwan semiconductor and tech companies will make new, direct investments totaling at least US$250 billion to expand chip, energy, artificial intelligence (AI), and other technology production capacity in the United States. Additionally, Taiwan will provide credit guarantees of at least US$250 billion to facilitate additional investment by Taiwan companies in the U.S. semiconductor supply chain and ecosystem, and the two will work together to establish advanced industrial parks in the U.S to encourage clustering. The deal must now undergo review in the Taiwan Legislative Yuan.

USTBC President Rupert Hammond-Chambers said, “The U.S. and Taiwan have consummated a historic tariff agreement. ‘Restoring American Semiconductor Manufacturing Leadership Through an Agreement on Trade & Investment with Taiwan’ will significantly expand the bilateral commercial relationship and the extensive technology relationship that already exists between the two. The dynamic between American chip designers such as NVIDIA and AMD and Taiwan Semiconductor Manufacturing Company (TSMC) may be the most important commercial economic partnership in the global economy. This agreement will turbocharge that web of relationships. The reduction of the tariff rate to no more than 15% is also a welcome development and should bring Taiwan’s economy onto the same competitive landscape as its primary competitors, particularly in North Asia.”

Hammond-Chambers added, “TSMC’s commitment to further expand its Arizona campus will provide more global balance in the manufacturing of high-end chips. Yet we should not see this as replacing Taiwan’s chip manufacturing leadership. As the Arizona production comes online, much of it will be consumed by significant growth in overall high-end chip demand – particularly from the United States. However, leading-edge chip production will still be developed in Taiwan, and its next generation fabs will still be rolled out on the island before being replicated in the States. This agreement should bolster U.S. long-term manufacturing goals while allaying concerns in Taiwan of any ‘hollowing out’ of the island’s own chip sector.”

“The commitment to stand up Taiwan-developed science parks in the same model as the world-famous Hsinchu Science Park will help create clustering that would both be recognizable to inbound supply chain partners of companies such as TSMC, while also catalyzing America’s re-establishment of critical supply chain partners.”

About the US-Taiwan Business Council:

The US-Taiwan Business Council (www.us-taiwan.org) is a membership-based non-profit association, founded in 1976 to foster trade and business relations between the United States and Taiwan. The Council provides its members with business intelligence, offers access to an extensive network of relationships, and serves as a vital and effective representative in dealing with business, trade, and investment matters.