The U.S. and Taiwan struck a trade deal on Thursday night, cutting prices of goods imported from the tech-centric region in exchange for investment inside the U.S.
The deal means that tariffs on imported goods from Taiwan will fall from 20 percent to 15 percent, Reuters reported. The move comes just days after the Trump administration placed additional tariffs on the sale of “advanced computing chips” like the Nvidia H200, used in data centers.
In return, Taiwan companies will invest $250 billion in U.S. facilities to increase domestic production of semiconductors, AI, and energy, including $100 billion already committed by TSMC into its own fabs, in Arizona and elsewhere. U.S. Commerce Secretary Howard Lutnick told CNBC that the goal was to bring 40 percent of Taiwan’s supply chain to the United States.
China regards Taiwan as its own territory, while Taiwan disputes that position. The difference has prompted Chian to hold military exercises near the island, whose military forces are far smaller than its larger neighbor.
“Look, they need to keep our president happy, right,” Lutnick told CNBC, referring to Taiwan, as reported by Reuters. “Because our president is the key to protecting their country.”
Tariffs have become a maze for U.S. companies to navigate; some companies have even moved their manufacturing operations out of China into Southeast Asia to avoid earlier tariffs. Executives of those companies have told PCWorld that tariff enforcement can be complicated due to intermittent enforcement and the willingness of foreign governments, especially China, to subsidize manufacturing costs, giving them an advantage.
Meanwhile, persistent shortages in flash memory and DRAM have created their own unofficial tariffs of sorts, raising prices for many PCs and laptops. That could last years, vendors say.