Taipei: 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 U.S.
According to Focus Taiwan, the agreement would lower tariffs on Taiwanese goods to 15 percent, equating them with Japan and South Korea, which reached similar trade and investment understandings with the U.S. in 2025, as reported by the New York Times on Monday. As part of the deal, TSMC would also commit to constructing at least five more semiconductor facilities, or fabs, in Arizona, the report cited unnamed sources.
Cabinet spokesperson Michelle Lee responded to the report by stating that Taiwan and the U.S. have already reached a "broad consensus" on related issues and are currently discussing the timing of a wrap-up meeting. Lee assured that any confirmed arrangements will be publicly announced. She reiterated that the goals of Taiwan-U.S. tariff negotiations are to seek reductions in reciprocal tariffs, avoid tariff stacking, and secure preferential treatment under Section 232.
The U.S. is investigating whether semiconductors should be subject to "national security tariffs" under Section 232 of the Trade Expansion Act. TSMC has not commented on the report but is expected to address the issue at its investor conference on Thursday.
The Cabinet also declined to comment when contacted by CNA regarding whether its negotiators had considered the Supreme Court's ongoing examination of the constitutionality of Trump's tariffs or how a ruling might affect the negotiations. Although a ruling was anticipated, the court did not issue one on January 9 but indicated it might deliver a decision by Wednesday.
TSMC currently has three fabs at various stages of development in Arizona, stemming from a previous US$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 aimed for 2028. Ground was broken for a third fab in April 2025, with production targeted by the end of the decade, according to TSMC Arizona.
Early last year, TSMC pledged an additional US$100 billion in investment, including another three fabs. However, according to the NYT, the company has now pledged to build at least five more fabs as part of the trade talks.
The Trump administration currently imposes a 20 percent tariff on Taiwanese goods, alongside most-favored-nation tariffs, but has not levied tariffs on semiconductors exported from Taiwan, pending the Section 232 investigation. The Times cited unnamed Trump administration officials stating that countries investing in the U.S. would be exempt from Section 232 tariffs, though the mechanics of such a scheme remain unclear.
Source: Focus Taiwan