Taiwan and US Reach Consensus on Trade Agreement

Taiwan Announces General Consensus with US on Trade

Officials in Taipei have declared that Taiwan and the United States have reached a "general consensus" regarding a trade pact aimed at reducing tariffs imposed by the US on Taiwanese exports. The Taiwan Office of Trade Negotiations announced on Tuesday that the outlines of the agreement were established after months of negotiations with American officials.

"The goal of the tariff negotiations between the US and Taiwan has always been to seek reciprocal tariff reductions without accumulating tariffs and to obtain preferential treatment under Section 232," the office stated in a release. For now, the trade office has not responded to inquiries from Al Jazeera for comments.

US President Donald Trump announced in April a "reciprocal tax" of 32% on Taiwanese exports, which he later reduced to 20% in August while awaiting new negotiations. The countries have promised to increase investments in the US in exchange for reduced tariffs, starting last year when Trump initiated the trade war. Japan and South Korea agreed to invest $550 billion and $350 billion, respectively, to achieve a tariff reduction from 25% to 15%.

While the Taiwan trade office did not provide details about the agreement, Bloomberg and The New York Times reported that the island's tariff rate would be reduced to 15%. As part of the agreement, Taiwan Semiconductor Manufacturing Company (TSMC) will agree to build at least four new manufacturing facilities in the US state of Arizona. TSMC, the world's largest chip producer and supplier to companies like Nvidia and Apple, announced in March that it plans to invest $100 billion in new factories in the US, raising its total investment in the country to $165 billion.

Due to its strategic importance, the chipmaker has faced pressure from Washington since 2020 to expand production outside Taiwan. The US fears that a blockade of Taiwan by China, which claims the island as its own, could disrupt access to TSMC chips. Although TSMC has agreed to build new manufacturing facilities in the US, Japan, and Germany, it continues to produce the most advanced chips in Taiwan.