The Trump administration has recently finalized a significant trade agreement with Taiwan, focusing on enhancing domestic semiconductor manufacturing in the United States. This multibillion-dollar deal entails Taiwanese semiconductor and tech companies committing to direct investments totaling $250 billion in the U.S. semiconductor industry. These investments will encompass various sectors such as semiconductors, energy, and AI production and innovation.
Taiwan, a key player in semiconductor production, will also provide an additional $250 billion in credit guarantees to support further investments from these companies. The duration of these investments remains unspecified as of now.
In reciprocation, the United States plans to invest in Taiwan’s semiconductor, defense, AI, telecommunications, and biotech industries. However, the exact monetary value associated with the U.S.’s commitment in this deal has not been disclosed.
This development follows a recent proclamation by the Trump administration emphasizing the objective of bringing back semiconductor manufacturing to the U.S. The proclamation underscores the need to reduce reliance on foreign supply chains due to the economic and national security risks involved. With only 10% of semiconductors currently produced domestically, the U.S. acknowledges the importance of bolstering its industrial and military capabilities by fostering a more self-sufficient semiconductor industry.
The proclamation also announced a 25% tariff on certain advanced AI chips and hinted at imposing additional tariffs on semiconductors following the conclusion of trade negotiations with other countries, including Taiwan.
