US and Taiwan Seal Trade Deal, Cut Tariffs and Expand US Exports

The United States and Taiwan have finalised a reciprocal trade agreement that sets a 15% US tariff on imports from Taiwan and commits Taipei to sharply increase purchases of American goods over the next five years.

The deal, signed by officials from the Trump administration, confirms tariff reductions first agreed in January. It also outlines a timetable for Taiwan to remove or lower tariffs on nearly all US products.

According to documents released on Thursday by the U.S. Trade Representative, Taiwan will boost US purchases between 2025 and 2029. Planned imports include $44.4 billion worth of liquefied natural gas and crude oil, $15.2 billion in civil aircraft and engines, $25.2 billion in power grid equipment and generators, as well as marine and steelmaking equipment.

The agreement adds legal and technical details to the January framework, which reduced tariffs on Taiwanese goods — including semiconductor exports — to 15% from the 20% initially imposed. This places Taiwan on par with key Asian competitors South Korea and Japan.

“This is a pivotal moment for Taiwan’s economy,” President Lai Ching-te said in a Facebook post. He said the deal would strengthen supply chains and deepen high-tech cooperation between Taiwan and the US.

Lai added that Taiwan secured tariff exemptions for more than 2,000 products exported to the US, lowering the average tariff on US imports to 12.33%.

The agreement still requires approval by Taiwan’s parliament, where opposition parties currently hold a majority.

Investment and Market Access

Under the earlier January deal, Taiwan pledged that its companies would invest $250 billion in the US, focusing on semiconductors, energy and artificial intelligence. This includes $100 billion already committed by Taiwan Semiconductor Manufacturing Corp. US Commerce Secretary Howard Lutnick said the Taiwanese government would guarantee an additional $250 billion in investments.

While the final agreement does not provide further details, it says Taiwan’s representative office in Washington will work with US authorities to support new investments in advanced manufacturing sectors such as AI, semiconductors and electronics.

Taiwan will immediately remove tariffs of up to 26% on many US agricultural products, including beef, dairy and corn. However, some tariffs will remain higher, with levies on pork belly falling from 40% to 10% and ham from 32% to 10%.

The US also said Taiwan agreed to remove non-tariff barriers on motor vehicles and to accept US safety standards for cars, medical devices and pharmaceuticals.

Trade Balance Impact

US Trade Representative Jamieson Greer said the deal would expand export opportunities for American farmers, workers and manufacturers, while strengthening supply chains in high-tech industries.

US Census Bureau data shows the US trade deficit with Taiwan rose sharply to $126.9 billion in the first 11 months of 2025, up from $73.7 billion for all of 2024. The increase was largely driven by higher imports of advanced AI chips from Taiwan.