UPDATE 2-US, Taiwan finalize deal to cut tariffs, boost purchases of US goods

Trump administration officials signed a final reciprocal trade agreement that confirmed a 15% U.S. tariff rate for imports from Taiwan, while committing Taiwan to a schedule for eliminating or lowering tariffs on nearly all U.S. ‌goods. The document released by the U.S. Trade Representative's office on Thursday also commits Taiwan to significantly boost purchases of U.S. goods from 2025 through 2029, including $44.4 billion of liquefied natural gas and crude oil, $15.2 billion of civil aircraft and engines, $25.2 billion of power grid equipment and generators, marine and steelmaking equipment. The agreement adds technical language and ‌specific details to a trade framework deal first reached in January that cut tariffs on Taiwanese goods, including from its powerhouse semiconductor industries, to 15% from ‌the 20% initially imposed by Trump. That puts Taiwan on an equal footing with its closest Asian export competitors, South Korea and Japan.

"This is a pivotal moment for Taiwan's economy and industries to ride the winds of change and undergo a major transformation," Taiwan President Lai Ching-te wrote on his Facebook page. It will optimize the Taiwan–U.S. economic and trade framework, build trustworthy industrial supply chains ⁠and establish a ​Taiwan–U.S. high-tech strategic partnership, he added. The January ⁠agreement included a pledge by Taiwan that its companies would invest $250 billion to boost production of semiconductors, energy and artificial intelligence in the U.S., including $100 billion already committed by Taiwan Semiconductor Manufacturing Corp. The ⁠Taiwan government would guarantee another $250 billion in U.S. investments, Commerce Secretary Howard Lutnick said.

The final language did not provide further details on those investments, but said Taiwan's representative office in ​the U.S. would collaborate with U.S. authorities to facilitate additional new greenfield and brownfield investments "in strategic high-technology manufacturing sectors, including AI, semiconductors, and advanced electronics." The deal ⁠will immediately eliminate Taiwan's tariffs of up to 26% on many U.S. agricultural imports, including beef, dairy and corn. But some tariffs, including the current 40% tariff on pork belly and 32% on ⁠ham, ​will only fall to 10%, according to the tariff schedule. The U.S. said under the deal, Taiwan will remove non-tariff barriers on motor vehicles and accept U.S. auto safety standards as well as those on medical devices and pharmaceuticals.

U.S. Trade Representative Jamieson Greer said in a statement that the agreement will boost ⁠export opportunities for U.S. farmers, ranchers, fishermen, workers, and manufacturers. "This agreement also builds on our longstanding economic and trade relationship with Taiwan and will significantly enhance the ⁠resilience of our supply chains, particularly ⁠in high-technology sectors," Greer added.

For the first 11 months of 2025, the U.S. trade deficit with Taiwan ballooned to $126.9 billion from $73.7 billion for all of 2024, largely due to the large increase in imports of high-end AI chips from Taiwan, according ‌to U.S. Census Bureau ‌data.