On January 15, 2025, the Department of Commerce announced a new trade and investment agreement with Taiwan. In exchange for future investments in U.S. semiconductor and technology production, the United States will reduce several tariff rates on Taiwanese goods.
Key Tariff Reductions
- U.S. reciprocal tariff rate on Taiwanese goods capped at 15%.
- Section 232 duties on Taiwanese auto parts, timber, lumber, and wood products capped at 15%.
- The United States will apply zero-percent tariffs to generic pharmaceuticals, generic ingredients, aircraft components, and certain critical natural resources.
Incentives for U.S.-Based Semiconductor Production
To further encourage semiconductor manufacturing in the United States, the agreement introduces preferential Section 232 treatment:
- Companies constructing new semiconductor facilities in the United States may import up to 2.5× planned U.S. production capacity duty-free during the construction phase.
- After project completion, companies may import 1.5× their new U.S. production capacity without paying Section 232 duties.
As of the announcement date, the Department of Commerce has not provided an effective date for when the agreement or the reduced tariff rates will go into effect.
Resources:
Fact Sheet: Restoring American Semiconductor Manufacturing Leadership Through an Agreement on Trade & Investment with Taiwan | U.S. Department of Commerce