US, Taiwan finalize deal to cut tariffs, boost purchases of US goods

• Taiwan will immediately eliminate tariffs up to 26% on U.S. agricultural products including beef, dairy, and corn
• Taiwan commits to purchasing $44.4 billion in LNG and crude oil, $15.2 billion in civil aircraft, and $25.2 billion in power grid equipment through 2029
• The agreement reduces U.S. tariffs on Taiwanese semiconductors and other goods from the initial 20% to 15%, matching rates for South Korea and Japan

Summary: US-Taiwan Trade Deal Finalizes Tariff Cuts and Purchase Commitments

The Trump administration finalized a reciprocal trade agreement with Taiwan on February 12, setting a 15% U.S. tariff rate on Taiwanese imports while Taiwan commits to eliminating or reducing tariffs on nearly all American goods.

Key Financial Commitments:

Taiwan has agreed to substantial purchases of U.S. goods from 2025-2029:

• $44.4 billion in liquefied natural gas and crude oil
• $25.2 billion in power grid equipment, generators, marine and steelmaking equipment
• $15.2 billion in civil aircraft and engines

Tariff Details:

The agreement reduces U.S. tariffs on Taiwanese goods, particularly semiconductors, from the initially imposed 20% to 15%. This places Taiwan on equal footing with Asian competitors South Korea and Japan. Taiwan will immediately eliminate tariffs up to 26% on U.S. agricultural products including beef, dairy, and corn.

Market Implications:

The deal significantly benefits Taiwan's critical semiconductor industry while opening markets for U.S. farmers, ranchers, and manufacturers. U.S. Trade Representative Jamieson Greer emphasized enhanced supply chain resilience in high-technology sectors, underscoring the strategic importance of semiconductor supply chains.

Strategic Context:

This agreement builds on longstanding U.S.-Taiwan economic ties and represents a pragmatic approach to managing trade relationships in the Asia-Pacific region. The reduced tariffs for Taiwan's semiconductor exports are particularly significant given global reliance on Taiwanese chip production, while guaranteed U.S. goods purchases provide measurable economic benefits spanning energy, agriculture, and industrial equipment sectors through 2029.