US and Taiwan reach trade deal, with semiconductor chips and China in focus

The U.S. and Taiwan clinched a trade deal on Thursday that cuts tariffs on many of the semiconductor powerhouse's exports, directs new investments in the U.S. technology industry and risks infuriating China.

The deal deepens the Trump administration's ties with Taipei at a critical time as China ratchets up pressure on the island, which it views as its own, and Washington has worked to avoid an all-out trade war with Beijing.

Under the long-negotiated deal, Taiwanese chipmakers like TSMC that expand U.S. production will be charged a lower tariff on semiconductors or related manufacturing equipment and products they import into the U.S. and can import some duty-free.

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