U.S. and Taiwan Finalize New Trade Agreement 

By Katie Braman

On February 12, 2026, the United States and Taiwan finalized a new trade agreement between the two nations. This agreement brings along major tariff reductions, lowering the U.S. tariff rate for imports from Taiwan to 15% from the previous 20,% as well as committing Taiwan to a schedule for lowering or eliminating tariffs on nearly all US goods. Taiwan has committed to eliminating or reducing 99% of tariff barriers and resolving longstanding non-tariff barriers impacting U.S. exports of motor vehicles, medical devices, and pharmaceuticals. This will help to reinforce Taiwan as a critical economic partner of the U.S. and deepen the trade relationship between the countries.  

Taiwan is a critical technological partner, as Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest producer of semiconductor chips. As part of this reciprocal trade agreement, Taiwanese companies will invest $250 billion in addition to the $100 billion from TSMC, and another $250 billion from the Taiwanese government, all towards increasing production in semiconductors, artificial intelligence, and energy in the United States. This will help to support the creation of industrial parks and tech clusters in the U.S., contributing to the creation of jobs and boosting the U.S. economy.  

Other important adjustments in this agreement include preferential market access for U.S. industrial and agricultural exports. All things considered, this agreement should have positive impacts on the strategic trade relationship between the U.S. and Taiwan, strengthening economic ties while giving the U.S. access to a larger portion of the market. Some concerns arise considering the trade deficit between the U.S. and Taiwan is expected to rise, but further negotiations are required to determine if an agreement on these differences is reachable. The deal is awaiting approval by Taiwan’s parliament and will continue to be tracked for what potential impacts may come from this.