TAIPEI (TVBS News) — Taiwan's trade war with Washington reached a potential turning point Thursday (Jan. 15) as negotiators arrived for final talks that could slash tariffs and reshape the island's economic future. Vice Premier Cheng Li-chiun (鄭麗君) and chief trade negotiator Yang Jen-ni (楊珍妮) departed Taipei late Wednesday for the sixth round of negotiations, according to the Cabinet's Taiwan-U.S. Trade working group (行政院台美經貿工作小組), a government body coordinating bilateral trade policy. The delegation's arrival signals both sides view talks as entering decisive final stages.
Taiwan seeks to finalize the agreement before President Donald Trump meets Chinese President Xi Jinping (習近平) in April, adding urgency to negotiations. Taiwan currently faces 20 percent tariffs on U.S. exports, a rate imposed under Trump's reciprocal tariff policy that has cost manufacturers billions in additional expenses. The April deadline represents a critical window before potential U.S.-China agreements could affect Taiwan's negotiating position, potentially superseding or undermining any bilateral terms Taipei secures with Washington.
Taiwan's negotiating team pursues four primary objectives: reducing tariffs to 15 percent without stacking on most-favored-nation rates, securing Section 232 preferential treatment for semiconductors and related products, expanding Taiwan's role in U.S. supply chains, and establishing a strategic partnership in the global artificial intelligence supply chain. Officials said these goals aim to level Taiwan's trade position with Japan and South Korea, which secured similar terms last year.
The New York Times reported earlier this week that U.S. tariffs on Taiwanese imports could drop to 15 percent. The report indicated Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the world's largest contract chipmaker, plans additional Arizona investments, including construction of at least five new semiconductor plants. The expansion would represent one of the largest foreign manufacturing commitments in U.S. history and addresses Washington's push to reduce dependence on Asian chip production.
The timing coincides with — and complicates — a White House announcement Wednesday imposing 25 percent tariffs on specific advanced computing chips, including Nvidia H200 AI processors and AMD MI325X semiconductors. Chips supporting U.S. supply chains may receive exemptions under national security provisions. Taiwan's government indicated both sides previously reached consensus on preferential semiconductor treatment that will be confirmed during current negotiations, though officials declined to specify which products would qualify for exemptions.
Premier Cho Jung-tai (卓榮泰) told Cabinet members Thursday he hopes for "meaningful progress" from negotiations and expects domestic industries to adapt quickly once terms are finalized. Executive Yuan spokesperson Michelle Lee (李慧芝) said securing Section 232 exemptions or most-favored treatment remains a key negotiating priority for Taiwan's semiconductor industry, the island's economic crown jewel.
Both sides will announce any consensus reached following meetings, the trade working group said Thursday. Officials will sign a formal trade agreement at a later date and submit the full text to the Legislative Yuan (立法院), Taiwan's parliament, for review according to legal procedures. Taiwan's government emphasized transparency and legislative oversight will be maintained throughout ratification, responding to concerns from opposition lawmakers who have demanded full disclosure of any investment commitments or market access concessions.
Taiwan's Office of Trade Negotiations said Tuesday both sides reached broad consensus on relevant issues and were discussing timing for a wrap-up meeting to finalize remaining details. Main elements of the agreement will be made public following that meeting, officials said, though specific dates for announcements have not been confirmed. The statement marked the first time officials publicly confirmed timing discussions for concluding the agreement.
Taiwan's Semiconductor Dominance at Stake
The negotiations represent months of talks as Taiwan seeks relief from tariffs threatening its export-dependent economy, which relies heavily on technology exports to the United States. Taiwan's semiconductor industry, which produces approximately 90 percent of the world's most advanced chips, faces pressure from both general tariffs and new semiconductor-specific levies that could reshape global supply chains and increase costs for American technology companies.
TSMC Chairman and President C.C. Wei (魏哲家) said Thursday at an investor conference that AI demand remains strong, dismissing concerns about potential market bubbles. The company expects 2026 revenue to grow nearly 30 percent in U.S. dollar terms. Wei projected AI accelerator chip revenue will grow at a compound annual growth rate exceeding 50 percent from 2024 to 2029, up from a previous 45 percent estimate, citing accelerating adoption across cloud computing, enterprise applications and sovereign AI initiatives.
People familiar with the emerging agreement told Bloomberg that Taiwan would receive the 15 percent tariff rate in exchange for TSMC significantly expanding U.S. chip production investment totaling hundreds of billions of dollars. TSMC has committed to building at least four additional fabrication plants in Arizona beyond six factories and two advanced packaging facilities already promised, these people said, making it one of the largest foreign investments in American manufacturing history.
The negotiations that brought Taiwan's top officials to Washington represent more than tariff percentages — they're about whether Taiwan can maintain economic leverage as great powers redraw trade maps. The April deadline looms not as an administrative detail but as a closing window. After that meeting between Trump and Xi, Taiwan's options narrow considerably. For now, Taiwan still has a seat at the table. The question is what it will cost to keep it. ◼