Taiwan aims to deepen its strategic partnership with the United States in artificial intelligence following a landmark trade agreement that reduces tariffs and boosts Taiwanese investment, Vice Premier Cheng Li-chiun said on Friday.
The deal, finalised on Thursday, cuts tariffs on a range of Taiwanese exports and directs major investments into the U.S. technology sector. It builds on Washington’s push for stronger semiconductor cooperation as the AI boom accelerates. Analysts said the agreement could draw criticism from Beijing, which continues to regard Taiwan as part of its territory.
According to U.S. Commerce Secretary Howard Lutnick, Taiwanese companies will invest $250 billion to expand production in semiconductors, renewable energy and AI across the United States. That includes $100 billion already committed by chipmaker TSMC in 2025, with further projects expected. The Trump administration said Taiwan will also provide an additional $250 billion in credit guarantees to support future investments.
Deepening High-Tech Cooperation
Speaking at a press conference in Washington, Cheng described the agreement as mutually beneficial, emphasising that it would also encourage U.S. investment in Taiwan. “In this negotiation we promoted two-way Taiwan–U.S. high-tech investment, hoping that in the future we can become close AI strategic partners,” she said during a livestreamed address.
Cheng stressed that the plan was led by private companies rather than the government, noting that Taiwanese firms would continue to expand domestically. “We believe this supply-chain cooperation is not ‘move,’ but ‘build.’ We expand our footprint in the U.S. and support the U.S. in building local supply chains, but even more so, it is an extension and expansion of Taiwan’s technology industry,” she added.
Taiwan’s Economy Minister Kung Ming-hsin later told reporters in Taipei that the investments would also cover AI servers and energy infrastructure, though the portion related to chipmaking would depend on company plans.
Industry Response and Global Implications
TSMC, the world’s largest contract chipmaker, welcomed the trade agreement, saying it supported “robust trade agreements” between the United States and Taiwan. The company said market demand for advanced chips remained strong and that all its investment decisions were based on “market conditions and customer demands.”
The agreement marks another milestone in Taiwan’s role as a critical global technology hub. It also aligns with Washington’s efforts to strengthen semiconductor supply chains and secure key partnerships in strategic industries, especially as competition with China intensifies.
By linking trade incentives with industrial cooperation, both sides aim to reinforce economic resilience while deepening ties in next-generation technologies such as AI, energy and advanced manufacturing.
with inputs from Reuters
