The U.S. and Taiwan have agreed to a trade deal that will see Taiwanese technology companies invest at least $250 billion into the U.S. for semiconductor, energy, and artificial intelligence operations. Furthermore, Taiwan’s government has agreed to provide a minimum of $250 billion in credit guarantees to Taiwanese enterprises for investing in the U.S. semiconductor supply chain.
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In exchange, the U.S. will lower the self-governing island’s tariff rate to 15% from 20% and exempt its generic pharmaceuticals, the ingredients used in those drugs, aircraft components, and some natural resources from tariffs.
TSM Eyes Arizona Expansion Under U.S.-Taiwan Agreement
In addition, Taiwanese companies that contribute to new U.S. semiconductor capacity “may import up to 2.5 times that planned capacity without paying Section 232 duties during the approved construction period.” Taiwanese companies that complete new chip projects in the U.S. will be able to import 1.5 times the capacity of finished facilities.
Commerce Secretary Howard Lutnick, who led negotiations on the U.S. side, told CNBC that Taiwan Semiconductor (TSM) recently purchased land in Arizona and is considering expanding its presence there as part of the deal.
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