The U.S. and Taiwan finalized a trade agreement to cut tariffs, boost market access for American products in Asia and channel billions of dollars into U.S. energy and technology projects.

Under the terms of the deal unveiled Thursday in Washington, Taiwan pledged to purchase more than $44 billion worth of liquefied natural gas and crude oil from the U.S. and open its market further to American goods, including meat products, dairy, wheat, medical products and automobiles.

Taipei is also committing to buy around $15 billion in American civil aircraft and parts and invest roughly $25 billion in power-generation equipment by 2029.

The signing formalizes an agreement Washington and Taipei announced in January that would lower tariffs on goods from the self-governed island to 15% from 20%. There are exemptions for generic pharmaceuticals, chips and smartphones, which President Donald Trump’s administration has investigated for possible future levies.

The average tariff rate on Taiwanese exports to the U.S. will fall to some 12.3% from 35.8%, when the reciprocal tariffs first took effect in April last year, Vice Premier Cheng Li-chiun said at a briefing in Washington.

The proportion of exports to the U.S. subject to reciprocal tariffs will also drop to 15.5% from 24%, Cheng said. The remaining exports, which are the subject of U.S. probes, will be eligible for most-favored tariff treatment going forward.

Taiwan will also permit ground beef and certain offal imports, and will align its rules on maximum residue limits for ractopamine in beef and pork products with international standards.

“The Agreement on Reciprocal Trade with Taiwan will eliminate tariff and non-tariff barriers facing U.S. exports to Taiwan, furthering opportunities for American farmers, ranchers, fishermen, workers, small businesses, and manufacturers,” U.S. Trade Representative Jamieson Greer said in a statement. “This Agreement also builds on our longstanding economic and trade relationship with Taiwan and will significantly enhance the resilience of our supply chains, particularly in high-technology sectors.”

Still, uncertainty remained about Taiwan’s promise to provide financing and investment for U.S. chip manufacturing. The document lacks significant new details about how that money would be spent.

The self-governing island initially committed to $250 billion in direct investment to expand advanced semiconductor, energy and artificial intelligence operations in the U.S., plus an additional $250 billion in government loan guarantees to boost the U.S. chip supply chain.

In return, Taiwanese companies would be allowed to ship a set amount of semiconductor chips to the U.S. tariff-free as American manufacturing capacity ramps up. A fact sheet released Tuesday said Taiwan would receive “preferential treatment” from future U.S. chips tariffs or other remedial measures.

The U.S. has also said it would expand investments in key Taiwanese industries — including semiconductors, AI, defense and biotechnology — according to a January statement from the Taiwan government.

The democracy that China views as its own has benefited immensely from the global artificial intelligence boom in recent years. The demand for chips to power the emerging technology propelled Taiwan’s economy to expand 8.6% last year, its fastest pace since 2010.

The deal has wide-ranging implications for Taiwan Semiconductor Manufacturing Co., Asia’s most valuable company. U.S. Commerce Secretary Howard Lutnick has said he expects “huge” investments from the chip manufacturer, which last year pledged $100 billion in U.S. projects.

Trump has prioritized restoring domestic semiconductor production, calling it critical for economic and national security. The goal could run into hurdles moving forward.

Lutnick has said his goal is to bring 40% of Taiwan’s chip supply chain and production capacity to the U.S. — a target Taiwanese officials have described as “impossible.”

Taiwan’s semiconductor industry has long been dubbed the island’s “silicon shield,” as it produces about 90% of the world’s most advanced chips, which power everything from spacecraft to smartphones. That position has led some in Taipei to worry that relocating production capacity to the U.S. — the island’s main military backer — could weaken Washington’s incentive to defend the island in the event of a Chinese invasion.

China has ramped up political and military pressure on Taiwan in recent years in a bid to reinforce its view that the island is part of its territory. Trump, who is set to meet with Chinese President Xi Jinping in April, has sought to ease disagreements with Beijing over trade, Taiwan and other issues. But the Chinese government cast a recent discussion between the two presidents about Taiwan in a contentious light.

The tariff agreement now requires approval from Taiwan’s legislature. The opposition Kuomintang, which holds a majority with a smaller allied party, has criticized the negotiations, saying they have lacked transparency. The party has also raised concerns about the impact on local pork producers and food safety issues related to feed additives in U.S. pork and beef.

The Trump administration also announced Thursday it reached a framework agreement with North Macedonia for the country to eliminate customs duties on all American industrial and agricultural goods. The U.S. will maintain its 15% tariff on North Macedonian products but identify some goods that will be exempt from the levy. The two countries are also planning additional talks to reduce trade barriers on agricultural products and strengthen security cooperation.

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(With assistance from Philip Glamann.)

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