The US and Taiwan agreed on a major trade deal on Thursday, under which tariffs on Taiwanese goods will be cut and in return Taiwan will invest US$250 billion in new investments in the US. This agreement is among the recent trade deals that US President Donald Trump has made. Earlier, he had also made such agreements with the European Union and Japan. All these agreements follow a comprehensive tariff plan introduced by Trump in April last year to address trade imbalances.
Trump also agreed on a one-year trade truce with the aim of stabilizing relations with China, the world’s second largest economy. Initially, Trump imposed a 32 percent tariff on goods coming from Taiwan, which was later reduced to 20 percent. Under the new agreement, the tariff rate has now been further reduced to 15 percent, which is similar to the tariffs imposed on other US trading partners in the Asia-Pacific region, such as Japan and South Korea.
The US Commerce Department said in a statement that the agreement with Taiwan would establish an “economic partnership” under which several “world-class” industrial parks would be built in the US to promote domestic manufacturing. The Commerce Department called it a “historic trade agreement” and said it would accelerate the U.S. semiconductor sector. The government of Taiwan confirmed the main points of this agreement in a statement, saying that it will deepen the ‘strategic cooperation’ between the two countries.