US and Taiwan Sign Reciprocal Trade and Investment Pact

The United States and Taiwan signed a bilateral Agreement on Reciprocal Trade in Washington on February 12, 2026. The pact establishes a 15% U.S. tariff rate on most Taiwanese imports, including semiconductors, reducing the average tariff from 35.78% to 12.33%. In exchange, Taiwan will eliminate or reduce up to 99% of its tariff barriers on U.S. goods, including immediate removals of tariffs on dairy, corn, and pharmaceuticals. Taiwan also agreed to lift import quotas and a 17.5% tariff on U.S. sedans.

To address a trade imbalance driven by computer chips, Lai Ching-te committed Taiwanese firms to invest $250 billion in U.S. semiconductor, AI, and energy sectors, supported by $250 billion in government credit guarantees. TSMC is the primary investor, pledging between $100 billion and $165 billion for fabrication plants and a research center. Taiwan also pledged to purchase approximately $85 billion in U.S. liquefied natural gas, crude oil, and civil aircraft through 2029.

The agreement modifies food safety regulations to allow imports of specific U.S. beef products, such as ground beef and certain offal, though 93 sensitive items like rice remain protected. The deal also accelerates the market launch of U.S. medical devices by accepting FDA authorizations. The pact now awaits ratification by Taiwan's opposition-controlled parliament, with several Taiwanese industry groups urging an expedited review to avoid potential U.S. tariff increases.