Taiwan

Taipei agrees to buy some $85bn of US energy, aircraft and equipment in exchange for 15 percent tariff rate.

The United States and Taiwan have finalised a trade deal to reduce tariffs on Taiwanese exports and facilitate billions of dollars of spending on US goods.

The agreement announced on Thursday lowers the general tariff on Taiwanese goods from 20 percent to 15 percent, the same level as Asian trade partners South Korea and Japan, in exchange for Taipei agreeing to buy about $85bn of US energy, aircraft and equipment.

Under the deal, Taiwan will eliminate or reduce 99 percent of tariff barriers and provide preferential market access to numerous US goods, including auto parts, chemicals, machinery, health products, dairy products and pork, the office of the US trade envoy said in a statement.

The US will, in turn, exempt a large range of Taiwanese goods from tariffs, including chalk, castor oil, pineapples and ginseng.

Taiwanese President William Lai Ching-te said Taipei had secured tariff exemptions for some 2,000 Taiwanese products, hailing the agreement as a “pivotal” moment for the self-governing island’s economy.

Lai said the deal, when various carve-outs are included, would take the average tariff rate on Taiwanese goods to 12.3 percent.

“From familiar items such as Phalaenopsis orchids, tea, bubble tea ingredients (tapioca starch), and coffee, to pineapple cakes, taro, pineapples, and mangoes – these products that represent Taiwan will become more price-competitive in the US market,” Lai said in a statement on social media.

“We aim not only to sell Taiwan’s great flavors overseas, but also to ensure Taiwanese brands truly enter international markets,” he said.

Lai made no mention of Taiwan’s chip industry, a crucial driver of the island’s economy that is estimated to account for up to 20 percent of gross domestic product (GDP).

Taiwan’s exports rose by 35 percent in 2025 on the back of furious demand for its AI chips, hitting a record $640.75bn.

Thursday’s agreement notably does not include specific commitments from Taiwan to invest in the US chip industry, despite an announcement by US President Donald Trump’s administration last month that Taiwanese firms would pour $250bn into the sector.

A fact sheet released by the Office of the US Trade Representative said the two sides “take note” of the January deal, which included a prior commitment by chip giant Taiwan Semiconductor Manufacturing to invest $100bn in the US.

US Trade Representative Jamieson Greer said Thursday’s agreement built on the longstanding trade relations between Taiwan and the US and would “significantly enhance the resilience of our supply chains, particularly in high-technology sectors”.

“President Trump’s leadership in the Asia Pacific region continues to generate prosperous trade ties for the United States with important partners across Asia, while further advancing the economic and national security interests of the American people,” Greer said.

Nearly one-third of Taiwan’s exports went to the US in 2025, making the country the island’s biggest market for the first time since 2000.

Feb. 5 (UPI) — Chinese leader Xi Jinping and U.S. President Donald Trump had a lengthy, far-reaching telephone conversation on Wednesday, in which the Asian leader warned his American counterpart that “the Taiwan question” was the most pressing issue in their countries’ relationship.

The self-governing, democratic island has increasingly become a focal point in U.S.-China relations amid growing concerns about an eventual Beijing invasion that have only been amplified since the Trump administration’s military operation last month in Venezuela that removed its authoritarian leader, Nicolas Madura.

Both Xi and Trump confirmed the Wednesday call, with the U.S. leader describing the conversation in a statement on his Truth Social platform as “excellent” and his relations with the Chinese head as “an extremely good one.”

He said they discussed the military, trade, the situation in Iran and the Russia-Ukraine war as well as Beijing considering buying U.S. agricultural products, including soybeans, which have been a sticking point for American farms. According to Trump, Beijing is considering increasing its U.S. soybean imports to 20 million metric tons.

A readout of the call from China’s foreign ministry made no mention of soybeans, but emphasized its claim to Taiwan in direct terms.

According to the ministry, Xi told Trump “the Taiwan question is the most important issue in China-U.S. relations.”

“Taiwan is China’s territory. China must safeguard its own sovereignty and territorial integrity and will never allow Taiwan to be separated,” Xi said, according to the ministry.

Despite Taiwan never having been part of the People’s Republic of China, which was founded in 1949, Beijing claims sovereignty over the island of some 23 million people under its One China policy. China views Taiwan as a rogue province that it has vowed to take by force if necessary.

The United States formally recognizes China’s claim to Taiwan, but maintains informal relations with Taipei, which has grown deeper over the last few years amid the Chinese threat of invasion.

Washington sells weapons to Taiwan. In December, the U.S. Congress approved a massive $11.1 billion arms deal with Taiwan, the largest ever between their two governments.

A Chinese foreign ministry spokesperson sternly rebuked the arms deal in a statement that announced sanctions against 20 American military-related companies and 10 senior executives who have participated in arming Taiwan while warning that “anyone who attempts to cross the line and make provocations on the Taiwan question will be met with China’s firm response.”

The readout of the Xi-Trump call on Wednesday warned that “the U.S. must handle the issue of arms sales to Taiwan with prudence.”

According to Beijing, Trump told Xi that he understands how China feels about Taiwan.

Taiwan was only mentioned by Trump in a list of the “many important subjects” he discussed with Xi.

Trump is to visit Xi in Beijing in April.

Worries about a potential Chinese move against Taiwan have increased in recent weeks following the U.S. military abduction of Maduro, which some have suggested could be used by Beijing to support its claims to Taiwan.

In an interview with The New York Times last month, Trump, pressed on the issue, disregarded the comparison, stating China isn’t experiencing the same threat from Taiwan that the United States faced from Venezuela.

“It’s a source of pride for him. He considers it to be a part of China, and that’s up to him, what he’s going to be doing. But, you know, I’ve expressed to him that I would be very unhappy if he did that, and I don’t think he’ll do that. I hope he doesn’t,” he said.

Asked if he set a precedent with the military action in Venezuela, Trump replied: “He may do it after we have a different president, but I don’t think he’s going to do it with me as president.”