Trump Administration Nears Tariff Deal With Taiwan
Proposed Deal Ties Lower Tariffs to New Semiconductor Plants
Key Takeaways:
- The Trump administration is nearing a tariff deal with Taiwan, entering negotiations to cut levies on Taiwanese exports, according to a person familiar with talks.
- The proposed framework would lower tariffs to 15% from 20% and prompt TSMC to build five Arizona chip plants, adding to up to $165 billion pledged.
- Still, the timing and benefits remain uncertain as the Supreme Court could rule on Trump’s global tariffs by Jan. 14, potentially weakening leverage in talks.
[Stay on top of transportation news: .]
The Trump administration is closing in on a tariff agreement with Taiwan, according to a person familiar with the matter, a move toward improving trade terms with a key Asian partner.
Washington and Taipei have entered the final stages of negotiations, said the person, who declined to be identified and did not elaborate on the terms of a potential deal.
Earlier Jan. 12, the New York Times reported that a deal would see the U.S. lower tariffs on the self-governing island’s exports to 15% from 20%. Taiwan Semiconductor Manufacturing Co. would in turn commit to building five new chip plants in Arizona, roughly doubling its manufacturing presence there. The framework could be announced this month, the paper reported, citing anonymous sources.
The White House, Office of the U.S. Trade Representative and Commerce Department did not immediately respond to requests for comment.
The commitments would add to existing plans for as much as $165 billion in U.S. investment by TSMC, the world’s top producer of advanced chips used in artificial intelligence, and an existing promise to open six factories and two packaging facilities in Arizona.
A signed deal would bring to an end talks between President Donald Trump’s team and the Taiwanese government that have dragged on for months. Taipei would gain a tariff rate that is in line with the one the U.S. applies to imports from its neighbors, Japan and South Korea. Trump would gain another investment pledge from a major overseas manufacturer, which he could tout as another win for his trade policy.
Still, much remains uncertain about the benefits of a potential deal — and the possibility of quickly clinching it. The Supreme Court is set to rule on the legality of Trump’s global tariffs as soon as Jan. 14. If they are overturned, it could rob the president of a crucial lever he’s wielded in trade negotiations.
If a deal is finalized, it’s unclear how quickly TSMC would be able to fulfill its commitment to drastically expand its U.S. manufacturing presence.
Since announcing sweeping tariffs on dozens of trading partners last April, the Trump administration has negotiated several deals with major economies including Japan, South Korea and the European Union to reduce levies on their goods in exchange for investment promises in fields including electronics, critical minerals and pharmaceuticals.
Want more news? Listen to today's daily briefing belowÌýor go here for more info:
