The deal was originally announced in mid-January, with Taiwan committing that its companies will directly invest $250 billion in the American tech sector . It will also offer an additional $250 billion in loan guarantees, making it easier for Taiwanese tech companies to secure capital for building new sites or expanding existing ones in the U.S. This is a total of $500 billion in investments, with TSMC’s $100-billion investment on its Arizona site announced last March already included in the amount.
The 15% tariff will not apply to chips and semiconductors coming from the island, though. Instead, Washington allowed Taiwanese chip makers to import chips without any import taxes up to 2.5 times the company’s total U.S. manufacturing capacity. This would then fall to just 1.5 times when the factory becomes operational, giving Taiwan’s chip companies preferential treatment . But if a company refuses to set up shop on American shores, it will suffer a devastating 100% tariff .
U.S. slashes Taiwan tariffs in new semiconductor trade deal
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/u-s-taiwan-ink-trade-deal-after-months-of-talks-agreement-cuts-tariffs-on-taiwanese-goods-to-15-percent-in-exchange-for-direct-investments-on-u-s-tech-sector-semiconductors-still-excluded#main
- https://www.tomshardware.com
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Informational only. No financial advice. Do your own research.