Taiwan pledges $250 billion in US spending in exchange for lower tariffs
Under the agreement, Taiwan Semiconductor Manufacturing will add new factories to its cluster in Arizona as part of a $250 billion investment in the U.S., the Commerce Department said.
The U.S. and Taiwan signed a trade deal Thursday aimed at boosting American production of semiconductors in exchange for lower tariffs, adding to the Trump administration’s efforts to bring critical industries to the U.S.
Under the agreement, Taiwan Semiconductor Manufacturing will add several new factories to its cluster in Arizona as part of a $250 billion investment in the U.S., the Commerce Department said. In exchange, the U.S. is cutting tariffs on Taiwanese goods to 15%, from 20%, and exempting Taiwanese chip companies like TSMC that are investing more in America. The contours of the deal were reported earlier in the week.
The agreement adds to deals with trading partners including the European Union and Japan and a truce with China. The Trump administration is attempting to de-escalate tensions over tariffs to avoid denting the economy while securing added investment in the U.S.
The Taiwan deal focuses on semiconductors because of the dominance of TSMC, which essentially has a monopoly on making the advanced chips that power the modern economy. They are critical for customers from Nvidia to Apple that want to build data centers for training AI models or sell consumer products.
TSMC has received several billion dollars in subsidies through the 2022 Chips and Science Act and will have roughly a dozen plants in Arizona after its latest expansion, including some advanced manufacturing capabilities that give it a sizable footprint outside Taiwan.
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com
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