Premier Cho Jung-tai (卓榮泰) yesterday greeted the nation’s US trade negotiation team when they arrived at Taiwan Taoyuan International Airport, commending them for the tariff reduction and investment agreements they reached with the US.
Led by Vice Premier Cheng Li-chiun (鄭麗君), and chief trade negotiator and Minister Without Portfolio Yang Jen-ni (楊珍妮), the team hashed out a “substantive” and “meaningful” deal with Washington, which was announced on Thursday, Cho told reporters at the airport.
Cheng said the trade agreement proved that “the hard work of the Taiwanese people, along with Taiwan’s technology and industries, had become a key force in the world,” and showed that the world needs Taiwan.
Photo: Chu Pei-hsiung, Taipei Times
The trade negotiation team returned after reaching a preliminary agreement with the US to reduce tariffs on Taiwanese goods to 15 percent, and a commitment that Taiwanese semiconductor and technology companies would invest at least US$250 billion in the US.
The figure includes a US$100 billion investment pledge by Taiwan Semiconductor Manufacturing Co (TSMC) last year, weeks after US President Donald Trump took office, US Secretary of Commerce Howard Lutnick said on Friday.
That implied 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 taken into account.
Taiwan has also agreed to provide up to US$250 billion in credit guarantees for financial institutions to support investments in the US market by the semiconductor industry, and the information and communication technology sector.
The terms of the agreement are to be signed in the coming weeks as part of a formal trade pact, which would require the approval of the Legislative Yuan.
Reactions to the agreement have been mixed, with some welcoming the tariff reduction from 20 percent to 15 percent — the same rate applied to Japan, South Korea and the EU. However, others — including members of the opposition — have raised concerns that the deal could force companies such as TSMC to move too much of their production abroad, effectively “hollowing out” Taiwan.
The agreement does not include a timetable for when Taiwan’s investments must be realized.
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 team and operations units.
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