U.S. Commerce Department Says U.S., Taiwan Reach Trade Deal Focused on Semiconductors

According to the U.S. Department of Commerce, the U.S. and Taiwan closed a trade deal on Thursday that cuts tariffs on many of the semiconductor powerhouse's exports, directs new investments in the U.S. technology industry and risks infuriating China.

The deal deepens the Trump administration's ties with Taipei at a critical time as China ratchets up pressure on the island and Washington has worked to avoid an all-out trade war with Beijing.

Under the long-negotiated deal, Taiwanese chipmakers, like TSMC, that expand U.S. production will get a lower tax rate for semiconductors they import into the U.S. The U.S. will also lower a set of broad tariffs that apply to most other Taiwanese exports to the U.S. from 20 percent to 15 percent. Generic pharmaceuticals, aircraft components and "unavailable natural resources" will face a 0 percent tariff, the Commerce Department said.

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