Business & Economics
US–Taiwan Reciprocal Trade Pact Finalized: 15 % Tariff Ceiling, $85 B Purchases & $500 B Investment Pledge
On 13 Feb 2026 Washington and Taipei signed the final text of a reciprocal trade agreement that locks U.S. tariffs on Taiwanese goods at 15 % and, in exchange, commits Taiwan to slash or remove almost all tariffs on U.S. products and to buy tens of billions of dollars of U.S. energy, aircraft and power equipment.
Focusing Facts
- Purchase schedule: Taiwan will import $44.4 billion of LNG/crude, $15.2 billion of civil aircraft & engines, and $25.2 billion of power-grid and heavy machinery between 2025–2029 (total ≈ $85 billion).
- Taipei pledged to eliminate or cut tariffs on 99 % of U.S. goods, trimming the average duty on U.S. exports to 12.33 % and dropping some farm tariffs from 26 % to zero.
- Separate side letter records at least $250 billion in Taiwanese investment in U.S. high-tech manufacturing—$100 billion of it from TSMC—with up to another $250 billion in state-backed loan guarantees.
Context
Great-power trade deals often follow strategic anxiety: the 1986-88 U.S.–Japan Semiconductor Accord, for instance, curbed Japanese chip dominance by linking market access to technology sharing. Today’s pact similarly leverages tariffs to pull a crucial supply chain—advanced semiconductors—closer to U.S. soil amid mounting U.S.–China rivalry. It caps a 40-year arc that began with the 1979 Taiwan Relations Act: economic ties substitute for the formal diplomacy Washington forfeited when it recognised Beijing. The deal reflects two structural trends: (1) weaponisation of trade policy for security goals—tariffs now buy chip factories, not just market access; (2) the re-regionalisation of globalisation, as the U.S. offers MFN-level rates only to partners willing to co-invest in its industrial base. Whether these commitments survive Taiwan’s opposition-led legislature or future U.S. administrations will shape chip geography for decades, but if implemented, the move could, like the 1940s mobilisation of U.S. steel and aircraft production, lock North America into the heart of the next century’s digital infrastructure—while eroding Taiwan’s traditional “silicon shield.”
Perspectives
Right-leaning, pro-Trump and business-friendly outlets
e.g., Arab News, Cryptopolitan — Frame the pact as a clear victory for President Trump’s Asia-Pacific strategy that will unlock U.S. jobs, investment and national-security gains. By foregrounding Trump’s leadership and economic upside, these stories gloss over Taiwan’s parliamentary hurdles and the geopolitical backlash from Beijing that the same articles briefly acknowledge.
Global wire services focused on hard economic data
e.g., Reuters, Anadolu Ajansı — Portray the agreement as a reciprocal tariff reduction tied to large, time-bound Taiwanese purchase commitments, while underscoring outstanding legislative approval and a swelling U.S.–Taiwan trade deficit. Their numbers-heavy, seemingly neutral tone still centres on U.S. deficit concerns and missing investment details, implicitly questioning whether Taipei can or will deliver the promised spending.
Asian and financial press highlighting Taiwan’s strategic upgrade
e.g., Firstpost, Bloomberg Business — Cast the deal as a "pivotal moment" that levels Taiwan with rivals like South Korea and Japan and cements a high-tech partnership that could transform the island’s economy. Leaning on upbeat quotes from Taipei officials, coverage may overstate long-term benefits and underplay worries about chip capacity moving offshore or opposition lawmakers blocking the pact.