US and Taiwan Finalize Trade Deal Lowering Tariffs and Easing Chip Imports

The United States and Taiwan completed a trade agreement on January 15, 2026, introducing new tariff rates and import provisions for a range of goods.

Under the terms of the agreement, tariffs on the majority of Taiwanese products entering the US market will be reduced from 20% to 15%. The deal also grants exemptions for certain products, including generic pharmaceuticals and aircraft parts, which will not be subject to tariffs.

In addition to the changes in tariff rates, the agreement introduces specific rules for semiconductor imports. The arrangement allows tariff-free entry for semiconductors up to 2.5 times the planned US production capacity during the construction phase of new facilities, and up to 1.5 times the capacity once those facilities are operational.

Taiwan has made an investment pledge connected to the agreement, which is intended to enhance semiconductor manufacturing capabilities within the United States. This investment is also aimed at reinforcing the US supply chain for chips.

What the numbers show

• Tariffs on most Taiwanese goods reduced from 20% to 15%
• Semiconductor imports allowed tariff-free up to 2.5 times planned US capacity during construction
• Tariff-free semiconductor imports limited to 1.5 times US capacity after completion

The agreement specifies that certain categories of goods, such as generic pharmaceuticals and aircraft components, are fully exempt from tariffs. These exemptions are designed to support sectors considered important for both countries.

The trade deal follows Taiwan’s commitment to invest in US semiconductor production, with the intention of strengthening the domestic industry and supporting supply chain resilience. The arrangement is structured to encourage collaboration between the two economies in technology and manufacturing.

By setting import thresholds for tariff-free semiconductors, the agreement establishes clear parameters for trade in this sector. These thresholds are linked to the timeline of US production facility development and operation.

The finalized trade deal marks a procedural step in US-Taiwan economic relations, with the new tariff rates and import rules now in effect as of January 15, 2026.

* This article is based on publicly available information at the time of writing.