Taipei hails US 15% tariffs ‘home run’ despite fears over US$500 billion cost

Taiwan secured a deal with the US to reduce export tariffs to 15% after nine months of negotiations, a move Taipei considers a major success. In exchange for the tariff reduction, Taiwan has committed to investing up to $500 billion in the United States. This agreement has sparked concerns in Taiwan regarding the potential hollowing out of its industrial base, particularly the semiconductor sector. Beijing has strongly condemned the deal, viewing it as economic exploitation and interference in its relationship with Taiwan, which it considers a part of China. The Chinese government also criticized Taiwan's ruling party for allegedly succumbing to US pressure.

In January 2026, Taiwan announced it reached a "general consensus" with the United States on a trade pact following months of negotiations. The agreement aims to reduce U.S. tariffs on Taiwanese exports, potentially lowering them to 15 percent. While Taiwan's trade office provided limited details, reports indicate the deal involves the Taiwan Semiconductor Manufacturing Company (TSMC) building additional production facilities in Arizona. This agreement follows a period of fluctuating tariffs imposed by the U.S. and aligns with a broader trend of countries pledging investments in the U.S. in exchange for tariff relief. The goal of the negotiations was to achieve reciprocal tariff reductions and preferential treatment for Taiwan.

In January 2026, the United States and Taiwan finalized a trade agreement aimed at strengthening economic ties and bolstering the US semiconductor industry. The deal involves Taiwan investing at least $250 billion in the US, focusing on semiconductors, energy, and AI, along with providing credit guarantees for further investment in the US semiconductor supply chain. In return, the US will reduce tariffs on Taiwanese goods from 20% to 15%. The agreement seeks to improve US access to Taiwan's dominant semiconductor industry, a critical component of the global economy, while Taiwan aims to remain the world's main semiconductor supplier. The US Commerce Department stated the deal will strengthen US economic resilience, create jobs, and bolster national security.

In December 2025, the United States approved an $11.1 billion arms sale to Taiwan, a move likely to anger China. The package, one of the largest ever to Taiwan, includes HIMARS rocket systems, howitzer artillery, ATACMS missiles, drones, and related equipment. The US State Department and Pentagon stated the sale supports Taiwan's defense capabilities and serves US national security interests. Taiwan's defense ministry welcomed the deal, emphasizing the importance of self-defense. China, which claims Taiwan as its territory, has yet to officially respond, but is expected to be angered by the sale.