US and Taiwan Finalize Trade Deal to Cut Tariffs and Secure $85 Billion in Purchases

The United States and Taiwan finalized a reciprocal trade agreement on Thursday that establishes a 15% tariff rate on Taiwanese imports while committing Taiwan to purchase nearly $85 billion in U.S. energy, aircraft, and machinery over four years. The deal reduces the previous 20% tariff on Taiwanese goods, including semiconductors, to align Taiwan with the rates applied to South Korea and Japan. Taiwan agreed to eliminate or reduce tariffs on 99% of U.S. goods, including the immediate removal of barriers for beef, dairy, and corn exports.

Under the agreement, Taiwan will purchase $44.4 billion of liquefied natural gas and crude oil, $15.2 billion of civil aircraft and engines, and $25.2 billion of power grid and industrial equipment through 2029. The document also references a $250 billion investment pledge from Taiwanese companies to boost U.S. production of semiconductors and artificial intelligence, including $100 billion already committed by Taiwan Semiconductor Manufacturing Co. The Taiwan government has further agreed to guarantee an additional $250 billion in U.S. investments.

U.S. Trade Representative Jamieson Greer stated the agreement will enhance supply chain resilience in high-technology sectors and expand opportunities for U.S. manufacturers and farmers. The deal comes as U.S. Census Bureau data shows the trade deficit with Taiwan reached $126.9 billion in the first 11 months of 2025, a significant increase from $73.7 billion in 2024. This growth was attributed primarily to the rising volume of high-end AI chip imports.