In exchange, the United States will reduce the reciprocal tariff rate on products from China's Taiwan region from 20% to 15%, and has pledged to impose zero reciprocal tariffs on generic drugs, their active pharmaceutical ingredients, aerospace components, and certain natural resources.

Howard Lutnick, the U.S. Secretary of Commerce, said on Thursday during an interview with CNBC's Brian Sullivan that, as part of the agreement, Taiwan Semiconductor Manufacturing Company (TSMC) has already purchased land in the United States and may expand its production capacity in Arizona.

Taiwanese semiconductor firms (e.g., TSMC) will invest at least $250 billion in new direct investments in the U.S. to build and expand advanced semiconductor, energy, and AI production and innovation capabilities.This includes TSMC's prior commitment of approximately $100-165 billion (e.g., for factory construction in Arizona), with the remainder to be realized through new projects.

In addition, the Taiwanese authorities will provide at least $250 billion in credit guarantees to support these companies' supply chain expansion in the United States.

As a result, the total investment scale reaches 500billion(500billion(250 billion in direct investment + $250 billion in credit guarantees), aiming to help the United States reduce its dependence on Taiwan's chip supply and enhance its domestic production capacity.

Since 2020, TSMC has completed one wafer fab in Arizona and is constructing a second, expected to be operational by 2028. Additionally, TSMC has committed to building four more new fabs in the coming years.

U.S. Secretary of Commerce Howard Lutnick stated in an interview that chip companies headquartered in Taiwan but not building factories in the U.S. may face 100% tariffs.

This indicates that the U.S. aims to relocate 40% of Taiwan's semiconductor supply chain to the U.S.