Taiwan scores big as tariffs drop from 20 percent to the new 15 percent, with some goods now duty-free. It's also partnering with the United States on AI. In exchange, Washington has secured an additional $500 billion in investments.
Following our report yesterday, the U.S. and Taiwan announced a win-win deal in Washington
on Thursday. Taiwan aims to become a key strategic partner to the U.S. in artificial intelligence.
Here's a breakdown of the main components of the deal. For Taiwan, the island nation scored two
major wins. Broad tariffs on most Taiwanese exports to the U.S. will drop from 20 percent
to 15 percent. It's the lowest rate among U.S.'s trade deficit partners. Last year, nearly 31
percent of Taiwan's exports went to the U.S., surpassing shipments to China and Hong Kong at
around 27 percent. It marked the highest share for the U.S. since 1999. Taiwanese chipmakers
like TSMC will enjoy lower rates on semiconductors, with some imports duty-free. And the U.S. promises
to give Taiwan preferential treatment if new tariffs are ever imposed in the future. Taiwan
is also aiming to team up with the U.S. as a strategic partner in artificial intelligence,
helping the U.S. maintain its edge in high-tech industries.
In this round of negotiations, we also promoted two-way high-tech investment between Taiwan and
the United States. We hope that in the future, both sides can become close strategic partners
in AI. So, aside from the previously mentioned Taiwan model for expanding investment in the U.S.,
the U.S. side also committed, through this investment MOU, to establishing a mechanism
for two-way investment to expand investment in Taiwan. In exchange, Taiwan will invest $500
billion in the U.S. There's two commitments from Taiwan. There's $250 billion that comes
directly from companies, and then there's $250 billion supplied by the government to help their
smaller and medium-sized companies all, and bring that whole supply chain to America. So,
we're going to bring it all over so we become self-sufficient in the capacity of building
semiconductors. The $250 billion coming to invest in American chipmaking includes $100 billion,
which has been already committed by TSMC in 2025. On Friday, Beijing said it firmly opposes the
U.S. reaching a trade agreement with Taiwan.
