Premier Cho Jung-tai (卓榮泰) today greeted the government's trade negotiation team on their arrival at Taiwan Taoyuan International Airport, commending them for the tariff reduction and investment agreements reached with the US.
Led by Vice Premier Cheng Li-chiun (鄭麗君) and chief trade negotiator Minister Without Portfolio Yang Jen-ni (楊珍妮), the team hashed out a "substantive" and "meaningful" deal with Washington, which was announced in the US on Thursday last week, Cho told reporters at the airport.
Photo: Chu Pei-hsiung, Taipei Times
Cheng said the trade agreement proved that "the hard work of Taiwanese, along with Taiwan's technology and industries, had become a key force in the world," and showed that the world "needs Taiwan."
The trade negotiation team returned after reaching a preliminary agreement with the US last week on the reduction of tariffs on Taiwanese goods to 15 percent, in return for Taiwan semiconductor and technology companies investing at least US$250 billion in the US.
The US$250 billion figure includes a US$100 billion investment pledged by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in March last year, weeks after US President Donald Trump took office, US Secretary of Commerce Howard Lutnick clarified in an interview on Friday.
That implies that TSMC's US$65 billion investment to build three advanced wafer fabs in Arizona, prior to Trump's return to office last year, was not included in the US$250 billion figure.
As part of the new trade agreement, Taiwan's government has also agreed to provide up to US$250 billion in credit guarantees for financial institutions to support investments in the US market by Taiwan's semiconductor industry, as well as its information and communication technology sector.
The terms of the agreement would be signed in the coming weeks as part of a formal trade pact, which would require approval by Taiwan's legislature.
In Taiwan, reactions to the agreement have been mixed, with some people welcoming the US tariff reduction on Taiwanese goods from 20 percent to 15 percent, the same as the tariff rate on Japan, South Korea and the EU.
Other commentators, including some members of the opposition parties, have raised concerns that the deal could force companies such as TSMC to move too much of their production to the US, effectively "hollowing out" Taiwan.
The agreement does not include a timetable for when Taiwan's investments must be realized.
In a CNBC interview last week, TSMC chief financial officer Wendell Huang (黃仁昭) said the company was accelerating its investments in Arizona because of high customer demand.
Even with its growing presence in the US, TSMC's most cutting-edge technology would remain in Taiwan for "practical reasons," Huang said, citing the intensive collaboration process between the company's research and development and operations units.
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