Taiwan and the US have reached a broad consensus on a trade deal, the Executive Yuan’s Office of Trade Negotiations said yesterday, after a report said that Washington is set to reduce Taiwan’s tariff rate to 15 percent.
The New York Times on Monday reported that the two nations are nearing a trade deal to reduce Taiwan’s tariff rate to 15 percent and commit Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to building at least five more facilities in the US.
“The agreement, which has been under negotiation for months, is being legally scrubbed and could be announced this month,” the paper said, citing three people familiar with the matter.
Photo: CNA
The reduced tariff rate is in line with those applied to Japan and South Korea, which struck trade deals last year, it said.
The timeline for TSMC’s further investment in the US remains unclear, it added.
TSMC did not comment on the report, but would likely address the issue at its investors’ conference tomorrow.
The objective of trade negotiations with the US has always been to reduce reciprocal tariffs without stacking them and secure preferential treatment for semiconductors under a legal provision known as Section 232, the office said in a statement.
After the fifth round of in-person Taiwan-US talks, Taipei continued to discuss supply chain cooperation with the US Department of Commerce through video meetings and written exchanges, it said.
Taiwan asked the US to create a more favorable investment environment for Taiwanese companies by offering support such as access to land, water, electricity and visas, as well as simpler administrative procedures, it said.
Taiwan also continued to exchange documents with the Office of the US Trade Representative to confirm the details of a bilateral trade agreement, and the two sides have reached a certain degree of consensus, it added.
Taiwan and the US are scheduling a final wrap-up meeting, after which they would publicly announce the details of the deal, the office said.
The government would brief the Legislative Yuan and the public on the agreement and submit it in full, along with an impact assessment, to the legislature for review, it said.
In the first phase of Taiwan-US trade talks from April to the end of July last year, both sides negotiated tariffs, trade barriers, economic security, procurement and supply chain issues, the office said in previous statements.
Talks then shifted to a second phase focused on supply chain cooperation under the “Taiwan model,” while Taipei continued to seek reduced, non-stacked reciprocal tariffs and preferential treatment under Section 232 for semiconductors and related products, it said.
Taiwan earlier concluded trade discussions with the Office of the US Trade Representative, then continued to discuss Section 232 tariffs and TSMC’s investment plans with the US Department of Commerce, the New York Times said.
Officials in US President Donald Trump’s administration have said companies that invest in the US would not be subject to Section 232 tariffs, but it is unclear exactly how the arrangement would work, it said.
TSMC has three fabs at various stages of development in Arizona under a previous US$65 billion investment commitment.
The first began volume production in the final quarter of 2024.
The structure for the second fab was completed last year, with mass production targeted for 2028.
The company broke ground on a third fab in April last year, with commercial production targeted by the end of the decade, TSMC Arizona said.
Early last year, TSMC pledged an additional US$100 billion in investment that would include another three fabs, but according to the New York Times, the company has pledged as part of the trade talks to build at least five more fabs, instead of the four currently pledged, including the fab on which it broke ground last year.
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