Taiwan, US Sign Trade Pact

Speakers

Laura Davison — Bloomberg Washington Deputy Bureau Chief

Summary

US and Taiwan have finalized a trade pact reducing general tariffs on Taiwanese goods from 20% to 15%, though exceptions remain for technology and pharmaceuticals.
Taiwan has pledged to purchase $44 billion in US energy and increase market access for US agricultural products (specifically meat).
A major uncertainty exists regarding the previously announced $500 billion investment into the US chip sector ($250B private, $250B government loan guarantees), as these details are notably absent from the finalized document.
Political risk remains high: Trump is reportedly considering withdrawing from the USMCA and has a history of threatening tariff hikes shortly after deals are struck (citing South Korea), while the deal was rushed to finalize before a scheduled Trump-Xi Jinping meeting in April.

Trade Ideas

Ticker	Direction	Speaker	Thesis	Time
XLE /XOM /CVX /CTRA /EOG	LONG	Laura Davison Washington Bureau Chief	"Taiwan is pledging to buy $44 billion of U.S. energy." This pledge represents a massive, government-mandated demand injection for US energy exporters. Unlike the vague chip investment promises, the energy purchase commitment is explicitly cited as part of the finalized deal, directly benefiting large-cap US producers and LNG exporters. LONG US Energy majors and exporters to capture the revenue from this $44B commitment. Trump reneging on the deal or imposing new tariffs that void the purchase agreements.	—
US AGRICULTURE	LONG	Laura Davison Washington Bureau Chief	The deal includes "commitments from Taiwan to purchase... agricultural products," specifically allowing US meat to enter the market despite opposition from Taiwanese domestic parties. The removal of trade barriers for US meat and explicit purchase commitments expands the total addressable market for US agricultural firms. LONG US Agriculture sector. Domestic political pushback in Taiwan (opposition party concerns) could delay implementation or limit volume.	—
TSM	WATCH	Laura Davison Washington Bureau Chief	The finalized document "doesn't detail" the previously announced $500 billion investment ($250B private / $250B gov guarantees) into the US chip sector. Additionally, while general tariffs dropped to 15%, there are "exceptions for tech." The absence of the investment language creates significant uncertainty regarding the financing and speed of TSMC's US expansion. If the loan guarantees are not locked in, capital expenditure plans may be delayed. Furthermore, if "tech" is an exception to the tariff cut, TSM may not benefit from the 15% rate, leaving it exposed to Trump's volatile trade policy. WATCH. The macro setup is fragile; the deal is signed, but the most critical component for the semiconductor sector (the investment capital) is missing. Trump imposes new tariffs (like he threatened South Korea) or the US chip expansion stalls due to lack of funding guarantees.	—
EWC /FXC	AVOID	Laura Davison Washington Bureau Chief	"Trump also... has been privately weighing this week whether to pull out of the USMCA North American trade pact." Even the rumor of a USMCA withdrawal is toxic for Canadian and Mexican assets, as their economies are heavily integrated with the US. Uncertainty regarding the treaty undermines the investment case for Canadian equities and currency. AVOID Canadian equities and currency exposure until the USMCA threat resolves. Trump reaffirms commitment to USMCA, causing a relief rally.	—