After months of negotiations, Taiwan’s negotiators said they struck a “general consensus” with the United States on a trade agreement.
After US President Donald Trump imposed a 32% tax on Taiwanese exports, which was subsequently reduced to 20% as part of his sweep of actions against dozens of trade partners, Taipei and Washington started negotiating a trade agreement in April 2025. In an effort to prevent a negative impact on its exports of semiconductor chips, Taiwanese President Lai Ching-te has promised to raise defence spending and investment in the world’s largest economy.
The Office of Trade Negotiations said in a statement that there was a “general consensus” on these issues, as it continued, “The goal of the US-Taiwan tariff negotiations has always been to seek reciprocal tariff reductions without stacking tariffs, and to obtain preferential treatment under Section 232 for semiconductors, semiconductor derivatives, and other items.”
The US Trade Expansion Act’s Section 232 permits the imposition of tariffs in situations where national security is deemed to be in jeopardy. According to the statement, “both sides are currently discussing the schedule for a concluding meeting, and an announcement will be made once it is confirmed.”
Additionally, Taiwan’s trade officials promised to give the public and the opposition-controlled parliament “a complete explanation of the negotiations and the agreement.”
Taiwan is a major producer of electronics, including semiconductor chips, which are essential to the world economy. Trump’s government has stated that it wants more of the vital technology produced in the United States, and he has previously accused Taiwan of stealing the US chip sector.
In 2025, the Trump administration began looking into semiconductors and chip-making machinery under Section 232. At USD 73.9 billion, Taiwan’s trade surplus with the United States was the fifth largest of any nation in 2024.
Semiconductors and other information and communications technology products account for more than half of its exports to the world’s largest economy.
In an effort to win over Trump, Lai has promised to increase defence spending to over 3% of GDP this year and 5% by 2030.
The largest contract chip manufacturer in the world, TSMC, has also promised to invest an extra USD 100 billion in the United States. However, Francois Chih-Chung Wu, Taiwan’s deputy foreign minister, recently told AFP that Taiwan intended to continue producing the “most advanced” chips domestically.