Taipei | Jan 20 (GeokHub) Taiwan says it plans to take a leading role in building a “democratic” high-tech supply chain alongside the United States, deepening cooperation in semiconductors and artificial intelligence under a newly concluded tariffs and investment agreement with Washington.
The deal, finalised last week, is designed to strengthen U.S.–Taiwan technological ties at a time of intensifying global competition over advanced chips that power artificial intelligence systems.
Speaking in Taipei, Vice Premier and chief trade negotiator Cheng Li-chiun said the agreement would allow Taiwan to expand its industrial footprint in the United States without weakening its domestic semiconductor base, which is central to the island’s economy.
“This is not about relocating supply chains or hollowing out Taiwan’s industry,” Cheng said. “It is about extending Taiwan’s strengths abroad — adding value and multiplying our global presence, particularly in the United States.”
Tariff Relief Tied to U.S. Investment
Under the agreement, Taiwanese chipmakers that expand manufacturing capacity in the U.S. will benefit from lower tariffs on semiconductors and related equipment, with some imports allowed to enter duty-free. Broader tariffs on most Taiwanese exports to the U.S. will also be reduced from 20% to 15%.
Companies such as Taiwan Semiconductor Manufacturing Company (TSMC) will be permitted to import up to 2.5 times their newly added U.S. production capacity in chips and wafers without additional tariffs during approved construction periods. Preferential treatment would continue even beyond that quota.
Taiwanese firms have committed to $250 billion in direct investment in U.S. semiconductor, energy and AI production, while the Taiwanese government will provide an additional $250 billion in credit guarantees to support further expansion.
Strategic Protection Against Future U.S. Tariffs
Cheng said Taiwan had also secured advance preferential treatment under any future U.S. national security measures targeting semiconductor imports, even as Washington considers imposing steep tariffs on companies that fail to build production facilities on American soil.
“Regardless of how future tariffs are structured, we have ensured that Taiwan receives the most favourable treatment,” Cheng said, noting that zero tariffs would apply within agreed quotas.
AI Partnership and Geopolitical Significance
Taipei sees the agreement as a foundation for a broader U.S.–Taiwan strategic partnership in artificial intelligence, positioning both sides as leaders of a trusted technology ecosystem among democratic nations.
“We hope the future will be defined by Taiwan and the United States leading together,” Cheng said. “Under the wave of AI, we aim to jointly build a resilient high-tech supply chain for the democratic world.”
The United States remains Taiwan’s most important security and political supporter despite the absence of formal diplomatic ties. China claims the self-governed island as its own and has not ruled out the use of force, adding geopolitical weight to Taiwan’s growing role in global technology supply chains.
