The U.S. and Taiwan have reached a trade agreement to build chips and chip factories on American soil, the Department of Commerce announced on Thursday.
As part of the agreement, Taiwanese chip and technology companies will invest at least $250 billion in production capacity in the U.S., and the Taiwanese government will guarantee $250 billion in credit for these companies.
In exchange, the U.S. will limit reciprocal tariffs on Taiwan to 15%, down from 20%, and commit to zero reciprocal tariffs on generic pharmaceuticals, their ingredients, aircraft components, and some natural resources.
Taiwanese auto parts, lumber, and related products will also avoid tariffs over 15% under Section 232, the announcement said.