US requires 40% of the semiconductor supply chain capacity in Taiwan to be introduced into the US: The US and Taiwan have reached a major tariff and semiconductor agreement, with tariffs on Taiwanese products reduced to 15%

The US Department of Commerce announced on Thursday, January 16, that the US and Taiwan have reached a trade agreement to reduce the tariff rate previously imposed by the Trump administration on Taiwanese products from 20% to 15%, aligning it with the rates applied to Japanese and EU products. Taiwanese semiconductor companies will invest at least $250 billion in the US to expand their semiconductor production capacity.

According to AFP, the US Department of Commerce stated in a statement that as part of the agreement, Taiwanese semiconductor companies will make "at least $250 billion" in investments in the US to expand semiconductor production capacity; additionally, the US will provide $250 billion in credit guarantees to "strengthen the resilience of the US semiconductor ecosystem and supply chain."

US Commerce Secretary Rutenberg said in an interview with CNBC: "Our goal is to bring 40% of the capacity in the Taiwanese semiconductor supply chain into the US."

He emphasized that the semiconductor issue relates to national security. "We need these chips, and they must be manufactured in the US. We cannot rely on a place 15,000 kilometers away to provide critical products for US national security."

According to the Department of Commerce statement, Taiwan will also support investments in the US in the fields of the semiconductor industry, artificial intelligence, defense technology, telecommunications, and biotechnology.

As an equivalent arrangement, the tariff rate on products exported from Taiwan to the US that are subject to industry-specific tariffs—including automotive parts and construction lumber—will no longer exceed 15%, down from a minimum of 20% previously. This places Taiwanese products on par with those from Europe and Japan in terms of tariff treatment.

At the same time, certain specific products will be completely exempt from tariffs, including generic drugs and their active ingredients, natural resources not available domestically in the US, and aerospace industry components.

Taiwan and the US began negotiations in April of last year. At that time, the Trump administration had threatened to impose tariffs as high as 32% on Taiwanese exports, later reducing the rate to 20%.

As the world's most important advanced chip foundry, TSMC is a key supplier of chips for a wide range of critical products, from defense systems to AI and smartphones. The company announced last year that it would add a $100 billion investment in the US.

Trump had previously announced in April of last year that he would impose a package of tariffs on all imports entering the US, calling it an "equivalent measure." Subsequently, the US made exceptions for some goods that could not be produced or grown domestically in the US.

Meanwhile, some countries still face additional tariff measures. Washington accuses Canada, China, and Mexico of being related to the flow of fentanyl into the US; India for continuing to purchase sanctioned Russian oil; and Brazil for judicially prosecuting and detaining a Trump ally, leading to increased tariffs.

Domestic legal disputes in the US remain to be resolved

In the US, multiple Democratic-led state governments and some small and medium-sized enterprises believe that Trump exceeded his presidential authority when implementing broad tariff measures. Some federal courts have supported this view, but have refused to immediately cancel the relevant tariffs before the appeal process concludes.

The US Supreme Court is expected to make a ruling soon. AFP noted that if the Supreme Court ultimately rules these tariff measures invalid, it would raise questions about the legal validity of the relevant trade arrangements, as many of these arrangements are memorandums of understanding rather than formal treaties, and their negotiation and approval processes are typically more lengthy.

Source: rfi

Original: toutiao.com/article/1854477072463176/

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