According to the latest update, the US Department of Commerce unveiled that Taiwanese businesses will make an upfront investment of at least $250 billion into their US production capacity, while Taiwan's government will provide credit guarantees of at least another $250 billion in support of the semiconductor industry and supply chain in the US. The US and Taiwan have signed an agreement that will see a multi-billion dollar investment into domestic development of semiconductors and related infrastructure.
As part of the ongoing story, reciprocal tariffs will be limited to 15 percent, compared with the previous 20 percent rate. Generic pharmaceuticals and their generic ingredients, aircraft components, and unavailable natural resources will be not be subjected to reciprocal tariffs under the arrangement. Taiwanese firms with US production will also see increased import amounts without being charged duties under the Section 232 framework. In exchange, Taiwan will receive a better deal on tariffs.
The report highlights that the major Taiwanese chip manufacturer had previously committed to investing $100 billion in its US operations over four years. Commerce Secretary Howard Lutnick told CNBC in an interview that the current US government wants to bring 40 percent of Taiwan's semiconductor supply chain stateside, continuing to use tariffs as an incentive. "If they don’t build in America, the tariff’s likely to be 100 percent,” Lutnick said. According to reports from CNBC, Taiwan Semiconductor Manufacturing Organization (TSNC) is already in position to take advantage of the fresh trade agreement with further expansion in Arizona.
According to the latest update, if you buy something through a link in this article, we may earn commission.