Trump administration strikes $250 billion trade deal with Taiwan in midst of tech battle with China

The Trump administration has struck a major trade agreement with Taiwan that will see the Asian country invest billions of dollars in American chip manufacturing in exchange for lower tariffs. 

The Commerce Department announced the deal Thursday, handing the U.S. a big win in the global competition with China for global technology supremacy.

The deal directs Taiwanese semiconductor and technology companies to directly invest at least $250 billion in building and expanding advanced semiconductor, energy, and artificial intelligence production and innovation capacity in the United States. 

Taiwan will also provide at least $250 billion in credit guarantees to help support additional investments from Taiwanese enterprises.

The U.S. will respond by capping its tariffs on Taiwanese auto parts, timber, lumber, and wood derivative products at 15%, and tariffs on generic drugs, aircraft parts and certain unavailable natural resources will be reduced to zero percent.

"This Taiwan agreement represents the largest semiconductor reshoring commitments in American history," Commerce Secretary Howard Lutnick said in an X post Friday. "It's going to drive $250B in corporate semiconductor investment as well as $250 billion in Taiwan government supported small and mid sized semiconductor supply chain building in America. 

"U.S. advanced manufacturing coupled with this deal will bring chip production back home, create high-paying American jobs, and secure our economic and national security for decades to come," he added. 

Misty Severi is a news reporter for Just The News. You can follow her on X for more coverage.