U.S. and Taiwan Reach Trade Deal

Trade Update • Jan. 16, 2026

Key Points

• The U.S. and Taiwan signed a trade and investment agreement focused on semiconductors.
• U.S. reciprocal tariffs on Taiwanese will not exceed 15%.
• Section 232 duties on Taiwanese auto parts, timber, lumber, and wood derivatives are also capped at 15%.
• Zero percent reciprocal tariffs apply to generic pharmaceuticals, pharmaceutical ingredients, aircraft components, and unavailable natural resources.
• Taiwanese companies committed at least $250 billion in direct U.S. investments, with an additional $250 billion in credit guarantees.

On January 15, 2026, the U.S. Department of Commerce released a fact sheet confirming that the U.S. and Taiwan reached a trade and investment deal to boost America’s semiconductor supply chains. Signed by the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office, the agreement combines tariff limits, Section 232 duty incentives, and large-scale investment commitments. 

Tariff Structure

• U.S. reciprocal tariffs on Taiwanese goods are capped at 15%
• Section 232 duties on Taiwanese auto parts, timber, lumber, and wood derivatives are also capped at 15%
• Zero percent reciprocal tariffs for generic pharmaceuticals, pharmaceutical ingredients, aircraft components, and unavailable natural resources

Section 232 Treatment for Semiconductors

Future Section 232 duties on Taiwanese semiconductors will provide more favorable treatment to producers that invest in U.S. manufacturing. Companies constructing new semiconductor facilities in the United States may import up to 2.5 times their planned production capacity without Section 232 duties during approved construction periods.

After completing new U.S. chip production projects, eligible companies may continue importing up to 1.5 times their new domestic production capacity without paying Section 232 duties.

Investment Commitments

Alongside the tariff framework, Taiwanese semiconductor and technology firms committed at least $250 billion in direct U.S. investments, supported by $250 billion in credit guarantees. The agreement also supports the development of industrial parks in the United States and expanded bilateral investment access across semiconductor, AI, defense technology, telecommunications, and biotechnology sectors.

How GHY Can Help?

GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.

By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.

Contact Us Today! Booking a Meeting, email consult@ghy.com, or call +1 (800) 667-0771.