Taiwan-US High-Tech Partnership

The Taiwan government, in collaboration with the United States, is planning to build a “democratic high-tech supply chain” and establish a strong strategic partnership in the field of artificial intelligence (AI). This move follows the new tariffs agreement reached with Washington last week. Taiwan's chief trade negotiators state that the goal of this agreement is to elevate Taiwan–US technological relations to a new level. The agreement is especially significant for further strengthening Taiwan's leading role in the production of semiconductor chips essential for AI. US President Donald Trump has repeatedly urged semiconductor-leading countries like Taiwan to increase chip manufacturing in the US, and this is expected to boost investments in chips that power AI within the US. Under this new agreement, if Taiwan chipmakers such as TSMC expand their manufacturing operations in the US, they will benefit from reduced or zero tariffs on the import of semiconductors and related equipment into the US. Additionally, there is an agreement to reduce the broad 20% tariff on many Taiwan exports down to 15%.

Taiwan companies have also agreed to invest $250 billion in the US semiconductor, energy, and AI sectors, along with an additional $250 billion in credit guarantees. This will have a significant impact on accelerating high-tech manufacturing in the US. Taiwan’s Deputy Premier Cheng Li-chiun stated that this agreement does not represent a “hollowing out” of Taiwan’s chip industry. Describing the semiconductor sector as a “sacred mountain” that protects the country’s economy, she said this is an expansion of Taiwan’s technological strength abroad. She further explained that if chipmakers increase production in the US, they will be allowed to import chips and wafers tariff-free up to 2.5 times the new capacity. Moreover, the agreement opens the way for Taiwan to receive more favorable treatment under the ongoing US Section 232 national security investigation. Analysts view this new Taiwan–US high-tech and AI agreement as a crucial step toward building a new force in the global semiconductor supply chain based on “democratic values.”