Taipei has finalized a significant trade agreement with the United States that aims to enhance economic ties and facilitate substantial investments in American products. In a deal announced on Thursday, the tariff rate on Taiwanese exports will decrease from 20 percent to 15 percent, aligning it with the tariff levels that other major trading partners in Asia, including South Korea and Japan, currently enjoy. In return, Taiwan has committed to purchasing approximately billion worth of US energy, aircraft, and equipment, marking a milestone in bilateral trade relations.

Under this new agreement, Taiwan plans to eliminate or reduce tariffs on 99 percent of US goods, offering preferential market access for a variety of products such as auto parts, chemicals, machinery, health products, dairy, and pork. This is expected to enhance the competitive positioning of US goods in Taiwan, while the US will reciprocate by exempting a broad range of Taiwanese goods from tariffs, including items like chalk, castor oil, pineapples, and ginseng.

Taiwanese President William Lai Ching-te expressed optimism about the deal, declaring it a pivotal moment for the island’s economy. He noted that the agreement secures tariff exemptions for around 2,000 Taiwanese products, ultimately lowering the average tariff rate on Taiwanese goods to approximately 12.3 percent. Lai emphasized the desire to promote traditional Taiwanese products, such as Phalaenopsis orchids, bubble tea ingredients, and various tropical fruits, making them more price competitive in the US market.

Importantly, while the agreement enhances trade relations, it notably does not contain explicit commitments from Taiwan to invest in the American chip industry. This consideration comes amidst discussions that indicated significant investment from Taiwanese firms in the US semiconductor sector, which significantly contributes to Taiwan’s economic landscape.

The trade agreement is a testament to the sustained and growing economic relations between the United States and Taiwan. US Trade Representative Jamieson Greer highlighted that it builds on this long-standing partnership and seeks to fortify supply chains, particularly in high-technology sectors. He also pointed out that more than one-third of Taiwan’s exports were directed to the US in 2025, reflecting the importance of the American market for Taiwanese products.

As both nations continue to foster their economic cooperation, this agreement paves the way for an era of enhanced trade opportunities that could be mutually beneficial and strengthen ties in various sectors.

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