Taipei (Taiwan)

The Cabinet was tight-lipped Tuesday on a report saying that the United States had agreed to lower tariffs on goods it imports from Taiwan in exchange for Taiwan Semiconductor Manufacturing Co. (TSMC) building more chip foundries in the US, Focus Taiwan reported.

The agreement would lower tariffs on Taiwanese goods to 15 per cent, the same as for Japan and South Korea, which reached understandings on trade and investment with the US in 2025, the news report noted, citing a New York Times article.

"As part of the deal, TSMC would also commit to building at least five more semiconductor facilities, or fabs, in Arizona," the NYT reported, citing unnamed sources.

Responding to the report, Cabinet spokesperson Michelle Lee said only that Taiwan and the US have already reached "broad consensus" on related issues, and are currently discussing the timing of a wrap-up meeting.

Any confirmed arrangements will be announced publicly, she said.

"The goals of Taiwan-US tariff negotiations have consistently been to seek reductions in reciprocal tariffs, avoid tariff stacking, and secure preferential treatment under Section 232," Lee reiterated, as per the report.

US authorities are reportedly investigating whether semiconductors should be subject to "national security tariffs" under Section 232 of the Trade Expansion Act.

TSMC did not comment on the report but will likely address the issue at its investor conference on Thursday, as per the report.

The Cabinet also declined to comment when contacted by CNA on whether its negotiators had factored in the Supreme Court's ongoing consideration of the constitutionality of Trump's arbitrary tariffs or how a ruling might affect the negotiations.

The court did not issue a ruling on Jan. 9, contrary to some expectations, but has said it could deliver a ruling on Wednesday, according to a Focus Taiwan report.

TSMC currently has three fabs in Arizona at various stages of development under a prior USD 65 billion investment commitment.

The first began high-volume production in the final quarter of 2024. The second fab's structure was completed in 2025, with volume production targeted for 2028.

Ground was broken on a third fab in April 2025, with volume production targeted by the end of the decade, according to TSMC Arizona.

Early last year, TSMC pledged an additional USD 100 billion in investment that would include another three fabs, but according to the NYT, the company has pledged as part of the trade talks to build at least five more fabs (instead of the four currently pledged, including the fab on which ground was broken last year).

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The administration of President Donald Trump currently imposes a 20 per cent tariff on Taiwanese goods, in addition to most-favoured-nation tariffs, but has not levied tariffs on semiconductors exported from Taiwan, pending the Section 232 investigation.

The Times cited unnamed Trump administration officials as saying countries that invest in the US would be exempt from Section 232 tariffs, but said that it remained unclear how such a scheme would work.