The United States and Taiwan formalized a significant new trade relationship on February 12, 2026, with the signing of an ‘Agreement on Reciprocal Trade’. The pact goes beyond typical tariff reductions, linking market access to substantial investment and procurement commitments aimed at bolstering the U.S. manufacturing sector, particularly in high-technology fields.
Under the terms of the deal, the U.S. will cap its reciprocal tariff rate on Taiwanese goods at 15 percent, an improvement from an initial 20 percent, according to a report from SmarTrade. In return, Taiwan has agreed to eliminate or reduce 99 percent of its tariff barriers on a wide range of U.S. industrial and agricultural exports. Products set to benefit from improved market access include American autos, machinery, beef, dairy products, and pork.
The most striking elements of the agreement are the large-scale financial commitments made by Taiwan. According to SmarTrade and other sources, Taiwan has pledged to purchase nearly $85 billion in American products between 2025 and 2029. These purchases include $44.4 billion in liquefied natural gas and crude oil, $15.2 billion in civil aircraft and engines, and $25.2 billion in equipment for power grids, marine, and steel-making industries.
Crucially, the trade deal is strategically linked to a commitment for Taiwanese enterprises to invest at least $250 billion to build and expand advanced semiconductor, energy, and artificial intelligence production within the United States. This investment is intended to drive a “massive reshoring of America’s semiconductor sector” and strengthen domestic supply chains, as noted by the U.S. Department of Commerce. The agreement, which now awaits review by Taiwan’s legislature, represents a significant move to deepen economic and strategic ties between the two partners.
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