Taipei: Scholars and business leaders said a new trade agreement between Taipei and Washington is expected to further deepen bilateral economic and business ties, though Taiwan's opposition has raised concerns about the scale and implications of the pledged investment by Taiwan.

According to Focus Taiwan, at a news conference in Washington, Vice Premier Cheng Li-chiun announced that under a signed memorandum of understanding (MOU), Taiwanese semiconductor and technology companies will invest at least US$250 billion in the United States. The Taiwanese government will provide up to US$250 billion in credit guarantees to support those U.S. investments. The agreement also includes a tentative deal on tariff reductions, granting semiconductors and related products the most favorable treatment under Section 232 of the U.S. Trade Expansion Act, although final tariff rates and quotas remain to be finalized.

Riley Walters, an international economics expert at the Hudson Institute, mentioned to CNA that the scale of Taiwan's planned investment and the breadth of the agreement could represent the closest thing to a bilateral trade agreement between the U.S. and Taiwan. Walters noted that unlike previous initiatives, the newly signed MOU focuses directly on investment and future supply chains, potentially bringing the two economies into closer alignment.

Walters further speculated that Taiwan Semiconductor Manufacturing Co. (TSMC) is likely to be among the participants in the investment plan. He expressed confidence that the agreement would not hollow out Taiwan's economy, as many projects are intended to meet future demand for semiconductor production and advanced technologies. Walters emphasized the growing demand for ICT products over the next decade, suggesting that Taiwan's role in the industry will remain significant.

Despite this optimism, concerns have been raised by Taiwan's opposition and critics about the potential impact of Taiwanese companies investing heavily in the U.S. The Taiwan People's Party expressed apprehension that the reshoring of 40 percent of Taiwan's supply chain to the U.S., as claimed by U.S. Secretary of Commerce Howard Lutnick, could threaten Taiwan's domestic economic interests.

Lien Hsien-ming, president of the Chung-Hua Institution for Economic Research (CIER), addressed these concerns by suggesting that if the US$250 billion investments are carried out by TSMC, they may not be completed before the end of President Donald Trump's second term in 2029. Additionally, it remains unclear if this investment includes the US$165 billion previously pledged by TSMC.

TSMC responded positively to CNA, welcoming the stable trade agreement between the U.S. and Taiwan and highlighting the importance of close trade relations for future technological development. Meanwhile, cleanroom engineering firm United Integrated Services Co. (UIS) and Marketech International Corp. (MIC) noted that the government's plan to provide credit guarantees would aid in future fundraising efforts.