U.S., Taiwan sign $250 billion trade deal, cutting tariffs on Taiwanese goods

The United States and Taiwan reached a trade deal on Thursday (January 15, 2026) that cuts tariffs on Taiwanese goods in exchange for $250 billion in new investments in the U.S. tech industry. The deal is the latest President Donald Trump has struck- such as those with the European Union and Japan- since he unveiled a sweeping tariff plan last April to address trade imbalances. Mr. Trump also has a one-year trade truce with China to stabilise ties with the world's second largest economy. Mr. Trump initially set the tariff at 32% on Taiwanese goods but later changed it to 20%. The new agreement slashes the tariff rate to 15%, the same as levied on other U.S. trading partners in the Asia-Pacific region such as Japan and South Korea. In a statement, the U.S. Department of Commerce said the deal with Taiwan would establish an “economic partnership” to create several “world-class” U.S.-based industrial parks in order to help build up domestic production. The department described it as "a historic trade deal that will drive a massive reshoring of America's semiconductor sector.” The Taiwanese government affirmed key details in the deal in a statement, saying that the “Taiwan model" will go to the U.S. and help expand the global competitiveness of the island's technology industry while deepening strategic cooperation between the two nations. Taiwan's executive branch said the island's companies would specifically invest $250 billion in industries such as semiconductors, artificial intelligence applications and energy. In addition to cutting the tariffs on the island nation, the Commerce Department said it will exempt certain imports such as generic pharmaceuticals and aircraft components from Taiwan. Taiwanese semiconductor producers that invest in the U.S. also will get favorable tariff treatments, including exemptions, the department said. One day before the deal was announced, Beijing, which claims Taiwan to be part of China, scoffed at it, calling the agreement “an economic plunder” by the U.S. on Taiwan. TSMC to lead investments The deal came just when Taiwan-based TSMC, the world's largest computer chipmaker, on Thursday (January 15, 2026) announced plans to increase its capital spending by as much as nearly 40% this year after it reported a 35% jump in its net profit for the latest quarter thanks to the boom in artificial intelligence. Taiwan Semiconductor Manufacturing Corporation, a major supplier to companies including Nvidia and Apple, reported a net profit of 506 billion new Taiwan dollars ($16 billion) for the October-December quarter, a 35% surge from a year earlier, better than analysts' estimates. TSMC said on Thursday (January 15, 2026) that its revenue in the last quarter increased 21% from a year earlier to more than 1.046 trillion new Taiwan dollars ($33 billion). TSMC said it plans to boost its capital expenditure budget to $52 billion-$56 billion for 2026, up from about $40 billion last year. The company's Taiwan-listed shares have jumped 59% over the past 12 months, reflecting its strong position in the AI-driven market. Other tech giants including Microsoft, Meta and Alphabet are...

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