The Trump administration has finalized a significant multi-billion-dollar trade agreement with Taiwan aimed at enhancing semiconductor manufacturing in the United States.
The deal, announced by the U.S. Department of Commerce, includes a commitment from Taiwanese semiconductor and tech firms to invest $250 billion directly into the U.S. semiconductor sector. These investments will cover areas like semiconductors, energy, and AI production and innovation. Currently, Taiwan accounts for over half of the world’s semiconductor production.
Additionally, Taiwan is set to provide another $250 billion in credit guarantees to encourage further investments from these semiconductor and tech companies. However, the timeline for these investments is still unclear.
In exchange, the U.S. plans to invest in various sectors in Taiwan, including semiconductor manufacturing, defense, AI, telecommunications, and biotech. The announcement didn’t specify how much the U.S. would invest on its end.
This news follows a proclamation from the Trump administration outlining the goal of relocating more semiconductor manufacturing back to the U.S., while acknowledging that the country currently produces only 10% of semiconductors domestically.
The proclamation emphasized that relying on foreign supply chains poses a significant economic and national security risk. It noted that semiconductors are crucial to both the modern economy and national defense, meaning that any disruption in these supply chains could impact U.S. industrial and military capabilities.
Additionally, the proclamation announced a 25% tariff on certain advanced AI chips and indicated that further semiconductor tariffs would be implemented once trade discussions with other nations, like Taiwan, are finalized.
