Taiwan will commit at least $500 billion in combined direct investment and credit guarantees to expand semiconductor and advanced technology manufacturing in the United States under a new trade agreement signed Thursday.
The U.S. Department of Commerce said that the deal aims to “drive a massive reshoring of America’s semiconductor sector” that will “strengthen U.S. economic resilience, create high-paying jobs, and bolster national security.”
The deal would also lower tariffs on imports from Taiwan to no higher than 15% – down from the current 20% rate of “reciprocal tariffs” for most Taiwanese imports.
“Semiconductors are vital for America’s industrial, technological, and military strength. Yet, for far too long, the Washington establishment allowed this strategic sector to move offshore, leaving the United States dependent on foreign manufacturers and brittle global supply chains,” the Commerce Department said. “The Trump Administration is committed to reversing that trend.”
Taiwanese investment will come in two tracks: a $250 billion direct investment in building and expanding U.S. advanced semiconductors, energy, and artificial intelligence production and innovation capacity; and at least $250 billion in credit guarantees to drive investment by Taiwanese companies to support the creation and expansion of the full U.S. chips supply chain and ecosystem.
The United States and Taiwan will also establish U.S.-based industrial parks.
While no details were provided on what Taiwan semiconductor and technology companies will be involved, the country manufactures most of the world’s advanced chips. One company, the Taiwan Semiconductor Manufacturing Company (TSMC), is the largest semiconductor manufacturer in the world.
TSMC, which has operations worldwide, received $6.6 billion in direct funding under the CHIPS and Science Act from the Biden administration in late 2024.
Under the agreement signed Thursday, future U.S. semiconductor tariffs will give Taiwanese chipmakers a break if they build in the United States, allowing duty-free imports tied to new U.S. capacity. Companies could import equipment and materials up to 2.5 times their planned output tariff-free during construction, and receive a reduced rate on imports above that limit.
In addition, Taiwanese companies that have completed U.S. chip production projects will be able to import 1.5 times their new U.S. production capacity ?without tariffs.
Commerce’s deal follows a White House memo allowing certain advanced semiconductor exports to China and other nations, provided that the United States gets a 25% cut of those profits.