Tai-US tariffs set at 15%! Bloomberg: The US shifts to TSMC supply chain, Taiwan needs to invest an additional $500 billion

Taiwan and the US reach a key trade agreement, reducing tariffs on Taiwan to 15% in exchange for a $500 billion investment commitment. The US focuses on semiconductor supply chain security, preemptively solidifying tariffs and industry layout.

Taiwan-US Tariffs Reduced to 15%, Taiwan Gains Same-Level Treatment as Japan and South Korea

According to Bloomberg, Taiwan and the US have reached a crucial trade agreement. The US agrees to lower the overall tariff rate on Taiwanese products from 20% to 15%, officially placing Taiwan on the same trade footing as Japan, South Korea, and other major US allies. The timing of this agreement is particularly sensitive, coinciding with ongoing Supreme Court deliberations on whether the President has the authority to impose tariffs unilaterally under “economic emergency” grounds. The ruling could influence future trade policies.

Against this backdrop, the White House chose to finalize terms with Taiwan early, demonstrating that the Trump administration aims to reinforce existing tariff tools through bilateral agreements amid judicial uncertainty. The agreement not only involves tariff reductions but also sets upper limits on tariffs for auto parts, wood products, and includes zero-tariff arrangements for some pharmaceuticals and key raw materials, further reducing systemic friction for Taiwan exports to the US.

$500 Billion Investment in Supply Chain, US Locks in Semiconductor Security

As a condition for tariff concessions, Taiwan’s semiconductor and tech industries commit to large-scale US investments. According to the agreement, Taiwanese companies will invest at least $250 billion in direct capital into advanced semiconductors, energy, and AI infrastructure within the US, supplemented by approximately $250 billion in credit guarantees from Taiwan to support long-term supply chain expansion.

Taiwan Semiconductor Manufacturing Company (TSMC) is seen as central to the agreement. US Commerce Secretary noted that TSMC has purchased extensive land around its existing plant in Arizona and plans to build at least five more advanced wafer fabs, nearly doubling its manufacturing capacity locally. During construction, these new fabs will enjoy duty-free import quotas up to 2.5 times existing capacity under Section 232, and after commissioning, will retain 1.5 times the preferential quota, with the remaining capacity subject to lower tariffs.

US officials openly state that the policy goal is to gradually shift about 40% of Taiwan’s chip supply chain to the US to reduce reliance on overseas manufacturing, especially as demand for AI and defense chips rapidly increases.

Trump Uses Tariffs as Leverage, Chips Become a National Security Negotiation Chip

The Trump administration frames this agreement as a “national security priority,” emphasizing that semiconductors are no longer just economic commodities but strategic assets critical to AI, data centers, and military systems.

White House economic advisors also revealed that even if the Supreme Court later restricts the President’s tariff authority, the government is prepared to use alternative measures to ensure companies comply with US industrial repatriation policies.

Notably, the agreement also sends a tough signal. The US explicitly warns that Taiwanese companies not participating in US manufacturing plans may face punitive tariffs of up to 100%, creating a “carrot and stick” dual strategy. Amid rising geopolitical risks and heightened US concern over the Taiwan Strait situation, the US seeks to lock in Taiwan’s key chip capacity through institutionalized investment and tariff incentives.

Overall, this Taiwan-US chip deal not only reshapes bilateral trade conditions but also reveals that semiconductors have become a core bargaining chip in tariff negotiations. Before the Supreme Court’s ruling is clear, the Trump administration has chosen to solidify the outcome through agreements, aiming to secure greater dominance over US industrial policy and supply chain security.

This content is compiled by Crypto Agent from various sources, reviewed and edited by Crypto City. It is still in the training phase and may contain logical biases or inaccuracies. For reference only; do not consider as investment advice.