US and Taiwan Near Trade Deal: "15% Tariff Cut and Expanded TSMC Investment in the US"

NYT and Bloomberg Report
Agreement Could Be Finalized as Early as This Month

The Donald Trump administration is reportedly close to finalizing a trade agreement with Taiwan, which centers on reducing mutual tariffs to 15% in exchange for a significant expansion of semiconductor facility investments in the United States.

On January 12 (local time), local media outlets such as The New York Times (NYT) and Bloomberg, citing multiple sources, reported that the United States and Taiwan are in the final stages of negotiations on a trade deal based on these terms.

According to the NYT, the United States plans to lower the mutual tariff rate applied to Taiwan from the current 20% to 15%, bringing it in line with the rates applied to South Korea and Japan. In return, Taiwan has reportedly pledged to expand U.S. investments by TSMC, the world’s largest semiconductor foundry. The newspaper reported that TSMC has agreed to build five additional semiconductor plants in Arizona. This would roughly double the scale of TSMC’s planned investments in U.S. facilities.

This new investment plan is in addition to TSMC’s previously announced commitment of up to $165 billion for U.S. investments. TSMC had earlier stated it would build six semiconductor plants and two packaging facilities in Arizona.

This agreement could be officially finalized as early as later this month. However, the specific details regarding the scale and conditions of Taiwan’s promised investments in the United States have not yet been released.

Previously, South Korea and Japan each agreed to mutual tariff reductions with the United States in exchange for investment commitments of $350 billion and $550 billion, respectively. In South Korea’s case, aside from corporate investments, $220 billion out of the total $350 billion is to be invested in cash over the next ten years in sectors designated by the U.S. government.