The United States (US) has reached a trade agreement with Taiwan, with the territory agreeing to remove or reduce 99 percent of its tariff barriers, the office of US Trade Representative Jamison Greer announced.
The US is heavily dependent on Taiwan for the production of computer chips, whose exports contributed to a trade imbalance of nearly $127 billion during the first 11 months of 2025, according to data from the US Census Bureau.
Most Taiwanese exports to the US will be taxed at a rate of 15 percent, the same rate as other trading partners in the Asia-Pacific region, Greer's office said.
The signing of the agreement was attended by Greer and Commerce Secretary Howard Lutnick, as well as Taiwan's Deputy Prime Minister Lee-chun Cheng and Cabinet Minister Jenny Yang.
The Taiwanese government said in a statement that the tariff rate set by the agreement allows its companies to compete on an equal footing with Japan, South Korea and the European Union (EU).
Cheng said Taiwan hopes the agreement will make it a strategic partner of the US "so that we can jointly consolidate the leading position of the democratic camp in high technology."
The agreement would make it easier for the US to sell cars, medicines and food products to Taiwan, while its key component is investment by Taiwanese companies in the production of computer chips in the US, which would help alleviate the trade imbalance.
In a separate agreement, Taiwan said it would invest $250 billion in US industries, such as computer chips, artificial intelligence applications and energy.
Taiwan President Lai Ching-te said Taiwan had agreed to reduce tariffs on imports from the United States, but that the rate for 93 items would remain unchanged to protect important agricultural and industrial sectors such as rice farming.
The US side said the agreement with Taiwan would help create several "world-class" industrial parks in the US to help build domestic production of advanced technologies like chips.
In return, the US would give preferential treatment to Taiwan regarding possible tariffs stemming from a Section 232 investigation into imports of computer chips and semiconductor manufacturing equipment.
Major American technology companies like Nvidia and AMD rely on Taiwanese giant TSMC to produce advanced chips.
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