The Trump administration is reportedly finalizing a trade agreement with Taiwan that would cut U.S. tariffs on the island's exports to 15% and secure a major expansion of semiconductor manufacturing in the United States.

The deal, which has been under negotiation for months and could be announced as soon as this month, would align Taiwan's tariff rate with those of Japan and South Korea, key U.S. allies that reached similar agreements last year, sources told The New York Times on Monday.

Since August, most Taiwanese imports have faced a 20% tariff, though semiconductors and some electronics were exempted pending a national security review.

As part of the agreement, Taiwan Semiconductor Manufacturing Co., the world's largest chipmaker, would commit to building at least five additional semiconductor fabrication plants in Arizona, roughly doubling its planned footprint in the state.

TSMC has already completed one Arizona plant, is finishing a second slated to open in 2028, and previously pledged four more facilities.

The administration has used tariffs as leverage to push allies to invest in U.S. manufacturing linked to national security priorities. Officials view expanding domestic chip production as critical amid concerns over global supply chain risks and rising tensions between China and Taiwan.

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