Taiwan’s premier on January 16 called the new trade agreement with the U.S. “the best tariff deal” for a country running a trade surplus with Washington, securing a tariff rate cut to 15% on Taiwanese goods. The deal also exempts tariffs on automotive and wood furniture industries as well as aerospace components.
Simultaneously, Beijing condemned the agreement, warning that it opposes any official arrangements Taiwan makes that emphasize sovereignty. China’s Foreign Ministry spokesperson Guo Jiakun criticized the deal as undermining their One-China policy.
The agreement must still pass Taiwan’s parliament, where some opposition lawmakers have voiced concern over its potential impact on the island’s domestic semiconductor competitiveness.
Besides strengthening trade, the deal is intended to solidify Taiwan-U.S. strategic ties amid persistent threats from China. On the same day, TSMC announced plans to boost capital spending by nearly 40%, reflecting booming demand driven by AI technology.
Observers should watch how the Taiwan legislature reacts, how Beijing’s opposition evolves, and TSMC’s execution of accelerated U.S. investments in semiconductor fabs.
