The New York Times (NYT) reported on the 12th, citing multiple officials, that the United States and Taiwan are soon to conclude a trade agreement centered on reducing reciprocal tariffs to 15% and expanding semiconductor investments in the U.S.
The outcome of the negotiations, potentially announced within this month, is expected to include reducing the reciprocal tariff on Taiwan to 15%, similar to South Korea and Japan. Taiwan’s existing reciprocal tariff rate was 20%.
As a “quid pro quo,” Taiwan’s largest semiconductor company, TSMC (Taiwan Semiconductor Manufacturing Corporation), has promised to construct five additional semiconductor plants in Arizona, according to the NYT.
TSMC completed one semiconductor plant in Arizona in 2020 and plans to complete another by 2028. In addition, TSMC is planning to build four more plants, effectively doubling its currently planned investment in facilities in the U.S.
Previously, South Korea reduced its reciprocal tariff rate conditioned upon an investment of 350 billion dollars, and Japan with 550 billion dollars. The total amount and schedule of Taiwan’s investment in the U.S. have not been specifically disclosed.
[Photo Source: EPA=Yonhap News]