The US will cut tariffs on Taiwanese goods to 15 in exchange for significant investment. The agreement, announced today, aims to bolster US semiconductor production. Taiwanese semiconductor and technology firms pledged at least $250 billion in direct investments. The Commerce Department confirmed the deal includes tariff carve-outs for Taiwanese companies investing in the US.

The agreement follows US efforts to strengthen its semiconductor industry. Covid-19 pandemic-related shortages exposed vulnerabilities in the supply chain. Commerce Secretary Howard Lutnick stated the deal would help the US achieve "self-sufficiency" in semiconductor production. He highlighted the goal of bringing semiconductor manufacturing to the US.

The tariff reduction is expected to impact the semiconductor market immediately. Analysts predict increased investment in US-based facilities. The US has allocated hundreds of billions in government subsidies to the semiconductor industry.

Semiconductor chips are crucial components in various industries, from automotive to consumer electronics. The US has been actively seeking to reduce its reliance on foreign chip production.

The next step involves finalizing the investment plans from Taiwanese companies. Further details on specific projects and timelines are expected in the coming weeks.