Taiwan has reached a significant trade agreement with the United States, securing a 15% tariff rate with no additional fees for its automotive and wood furniture industries, and zero tariffs on certain aerospace components. The deal, hailed by Taiwan’s Prime Minister Cho Jung-tai as the “best tariff deal” ever granted to countries with trade surpluses with Washington, comes as part of a broader push to strengthen economic and strategic ties with the US.
“This agreement demonstrates that the US views Taiwan as an important strategic partner,” Cho said on Friday. “For the time being, we have obtained the best tariff deal enjoyed by countries with trade surplus with the US.”
The accord reduces US tariffs on Taiwanese goods to 15% in exchange for $250 billion (€215.3 billion) in new US investments in the technology sector. Taiwan’s concessions are comparable to similar agreements reached by the European Union and Japan following US President Donald Trump’s threats of sweeping tariffs on multiple trading partners.
Trump had initially imposed a 32% tariff on Taiwanese goods, later reducing it to 20%. The new agreement also provides favorable tariff treatment for Taiwanese semiconductor firms investing in the United States.
Taiwan’s deal coincides with TSMC, the world’s largest chipmaker, announcing plans to increase capital spending by up to 40% this year, driven by demand from artificial intelligence. TSMC has pledged around $165 billion (€142 billion) in US investments, including accelerated construction of new fabrication plants in Arizona.
Beijing sharply criticized the agreement. “China always firmly opposes countries signing agreements with Taiwan that carry sovereign or official connotations,” said Foreign Ministry spokesperson Guo Jiakun. China views Taiwan as its territory and opposes independent diplomatic or trade arrangements.
Former US trade official Ryan Majerus described the timing of the deal as “interesting,” noting it comes amid unresolved legal questions over Trump-era tariffs, which the US Supreme Court could rule on this month. Nevertheless, Taipei, facing continued pressure from Beijing, prioritized strengthening ties with Washington. “Wanting to solidify things with the US probably played a big role here,” Majerus added.
The agreement still requires ratification by Taiwan’s parliament, where opposition lawmakers have raised concerns over potential impacts on the domestic semiconductor industry.
