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January 15, 2026 at 9:39 PM • by
The U.S. Department of Commerce announced a trade agreement on January 15, 2026, under which Taiwanese semiconductor and technology companies will invest at least $250 billion directly in the United States, with an additional $250 billion in credit guarantees to bolster American manufacturing in semiconductors, energy and AI[1][2][4]. The deal caps U.S. tariffs on Taiwanese imports at 15% and includes reciprocal U.S. investments in Taiwan’s key industries.
Investment Commitments and Tariff Adjustments
Taiwanese firms agreed to direct investments totaling at least $250 billion in U.S. facilities for semiconductors, energy and AI production. Taiwan will also offer $250 billion in credit guarantees to facilitate supply chain expansion[1][2]. The framework establishes U.S.-based industrial parks and sets U.S. tariffs on Taiwanese goods at a maximum of 15%, down from previous 20% reciprocal rates, with zero tariffs applied to select items including generic pharmaceuticals and aircraft components[1][2]. Future tariffs will exempt Taiwanese companies building U.S. production capacity, allowing duty-free imports linked to new domestic manufacturing[1].
Addressing U.S. Supply Chain Vulnerabilities
The agreement targets the decline in U.S. global semiconductor fabrication share, which fell from 37% in 1990 to under 10% in 2024 due to offshoring[1]. Only 10% of semiconductors are currently produced domestically, heightening dependence on foreign supply chains[summary]. U.S. officials described the deal as advancing ‘America First’ trade policies to restore manufacturing leadership[1]. Taiwan, which produces the majority of the world’s advanced chips, plays a central role through companies like TSMC[2].
Reciprocal U.S. Investments in Taiwan
In return, the U.S. will facilitate investments in Taiwan’s semiconductor, defense technology, AI, telecommunications and biotechnology sectors[4]. The deal follows months of negotiations and comes ahead of a Supreme Court decision on presidential tariff authority[2]. Commerce Secretary Howard Lutnick’s department emphasized semiconductors’ role in competing with China and driving innovation[2].
Semiconductor Supply Chain Restructuring
Semiconductor Supply Chain Restructuring
The agreement marks a structured shift from Taiwan’s dominant role in global chip production toward shared manufacturing capacity with the U.S. By tying tariff relief to domestic investments, it incentivizes Taiwanese firms to relocate fabrication facilities stateside, potentially reducing geopolitical risks from Taiwan Strait tensions[1][2]. This addresses the stark imbalance where U.S. production has dwindled to under 10% of global output, making supply chains vulnerable to disruptions[1]. The $500 billion total commitment—split between direct investments and guarantees—provides concrete financing mechanisms absent in prior pacts like the CHIPS Act, which focused on subsidies rather than bilateral trade leverage[2].
Tariff caps at 15% with exemptions create a predictable environment for cross-border operations, favoring compliant investors over pure imports. This model could serve as a template for U.S. deals with other allies, balancing protectionism with alliance-building amid rising tensions with China, which relies heavily on Taiwanese chips[2].
U.S. Manufacturing Capacity Expansion Timeline
U.S. Manufacturing Capacity Expansion Timeline
Implementation will likely prioritize establishment of U.S.-based industrial parks, with initial Taiwanese investments targeting advanced node fabs for AI and defense applications over the next 2-3 years[1]. TSMC and other firms may accelerate existing Arizona and other U.S. projects, scaling to meet the $250 billion pledge through phased commitments tied to tariff benefits[2]. Credit guarantees could unlock private financing, speeding construction amid labor and material shortages.
Longer-term, reciprocal investments may enhance Taiwan’s defense tech resilience, potentially integrating U.S. firms into joint AI and biotech ventures by 2028[4]. Market reactions will hinge on Supreme Court tariff rulings, but early signals suggest reduced trade friction and bolstered U.S. competitiveness against China[2]. Monitoring company-specific announcements will clarify allocation across energy, AI and semis.
