The Trump administration has signed a landmark multibillion-dollar trade deal with Taiwan designed to help the United States boost domestic semiconductor production.
Under the deal announced by the US Commerce Department on Thursday, Taiwanese semiconductor and technology companies agreed to make $250 billion in direct investments in the US semiconductor industry. These investments will cover semiconductors, energy and artificial intelligence “production and innovation,” according to press release. Taiwan is currently producing more than half of the world’s semiconductors.
Taiwan will also provide an additional $250 billion in credit guarantees for additional investment by these semiconductor and technology companies, according to the commerce department. The time period of these investments is unclear.
In return, the US will invest in Taiwan’s semiconductor, defense, artificial intelligence, telecommunications and biotechnology industries. The press release did not specify the dollar amount attached to the US side of the deal.
The news comes a day after the Trump administration released a proclamation that reiterated the country’s goal to bring more semiconductor manufacturing back to the United States and acknowledged that the process will take time, as only 10% of semiconductors are produced in the state.
“This reliance on foreign supply chains poses a significant risk to the economy and national security,” the proclamation said. “Given the fundamental role that semiconductors play in the modern economy and national defense, a disruption of import-dependent supply chains could strain the industrial and military capabilities of the United States.”
The proclamation, which announced 25 percent tariffs on some advanced artificial intelligence chips, also said that once trade talks with other countries — such as this deal with Taiwan — are completed, there will be additional semiconductor tariffs.
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