Following President Trump’s return to office, the United States has relaunched its tariff offensive. The White House has formally initiated semiconductor tariff procedures under Section 232, requiring negotiations with major trading partners within 90 days. As the Taiwan-US economic and trade agreement reaches a critical stage, Taiwan must simultaneously advance its strategy across tariffs, investment, and industrial cooperation to prudently address potential impacts.
Returning to Market Mechanisms: Investment and Credit Guarantees Must Not Be Conflated
Regarding the latest Taiwan-US investment and tariff agreement, Hsien-Ming Lien, President of the Chung-Hua Institution for Economic Research (CIER), noted that the agreement encompasses three major dimensions: “major opening, major procurement, and major investment.” It reflects substantive progress in bilateral investment and industrial cooperation. Within this framework, Taiwan Semiconductor Manufacturing Company (TSMC) and related enterprises have committed a total of US$250 billion in advanced process investments, an increase of US$85 billion over the original commitment. The government plans to offer up to US$250 billion in credit guarantees aimed at supporting the technology sector, specifically small and medium-sized enterprises, in their efforts to expand into the United States. This initiative will leverage Taiwan’s expertise in the development and management of science parks to enhance the deployment of the semiconductor supply chain.
President Hsien-Ming Lien emphasized that corporate investment and government credit guarantees are fundamentally different in nature, and the public misunderstanding of combining these two figures into US$500 billion is incorrect. The purpose of credit guarantees is to reduce risk and guide private investment. The overall design of the agreement prioritizes market mechanisms, and the outcomes of the government’s negotiations have outperformed those of Japan, South Korea, and Europe. This indicates that Taiwan-US economic and trade cooperation is progressing toward a more pragmatic and balanced approach.
70% of Taiwan’s Exports to the US Under Pressure: Investment Commitments Are Just the Beginning
Chun Lee, an Associate Research Fellow of the WTO & RTA Center at the CIER, indicated that approximately 70% of Taiwan’s exports to the United States are currently high-tech products that have not yet been subject to reciprocal tariffs. Instead, the most critical concern lies in the subsequent development of Section 232. Because Taiwan’s export structure differs from that of other countries, related negotiations must be handled in conjunction with other tariff and investment issues, essentially constituting “advance negotiations.” The outcomes are crucial to industrial competitiveness and supply chain positioning.
Investment in the United States and commitments represent only the beginning. Taiwan should pragmatically confront the United States’ long-term economic security and reindustrialization policies, seeking the most advantageous response strategy.
Author: CIER Editorial Team
Date: January 16, 2026