Taipei agreed to buy about $85 billion in U.S. energy, aircraft and equipment in exchange for 15% tariffs.
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The United States and Taiwan have signed a trade deal that lowers tariffs on Taiwanese exports and boosts billions of dollars in spending on American goods.
The deal announced Thursday lowers general tariffs on Taiwanese goods from 20% to 15%, the same level as Asian trading partners South Korea and Japan, in exchange for Taipei agreeing to buy about $85 billion in U.S. energy, aircraft and equipment.
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Under the agreement, Taiwan will eliminate or reduce 99% of tariff barriers and provide preferential market access to numerous U.S. products, including auto parts, chemicals, machinery, health products, dairy products and pork, the Office of the U.S. Trade Envoy said in a statement.
In response, the United States will exempt a wide range of Taiwanese products from tariffs, including chalk, castor oil, pineapple, and ginseng.
Taiwan President William Lai Ching-toku said Taipei had secured tariff exemptions for about 2,000 Taiwanese products, hailing the deal as a “pivotal” moment for the autonomous island’s economy.
Lai said if the deal includes various carve-outs, the average tariff rate on Taiwanese products will be 12.3%.
“From familiar items such as Phalaenopsis, tea, bubble tea ingredients (tapioca starch) and coffee to pineapple cake, taro, pineapple and mango, these representative Taiwanese products will become even more price competitive in the US market,” Lai said in a statement on social media.
“We aim not only to sell Taiwan’s great flavors overseas, but also to enable Taiwanese brands to truly enter the international market,” he said.
Lai did not mention Taiwan’s chip industry, a key driver of Taiwan’s economy that is estimated to account for up to 20% of gross domestic product (GDP).
Taiwan’s exports will increase by 35% in 2025 to reach a record $640.75 billion on the back of strong demand for AI chips.
It is notable that Thursday’s agreement does not include any specific commitments from Taiwan to invest in the U.S. semiconductor industry, even though U.S. President Donald Trump’s administration announced last month that Taiwanese companies would pump $250 billion into the sector.
A fact sheet released by the Office of the U.S. Trade Representative said the two countries “take note” of the January agreement, which included a pre-commitment by semiconductor giant Taiwan Semiconductor Manufacturing Co. to invest $100 billion in the United States.
U.S. Trade Representative Jamieson Greer said Thursday’s agreement builds on the longstanding trade relationship between Taiwan and the United States and “significantly strengthens the resiliency of supply chains, particularly in high-tech sectors.”
“President Trump’s leadership in the Asia-Pacific region continues to create rich trade relationships for the United States with important partners across Asia, while advancing the economic and national security interests of the American people,” Greer said.
By 2025, nearly one-third of Taiwan’s exports will go to the United States, making Taiwan its largest market for the first time since 2000.
