Taiwan–U.S. Trade Deal Could Help Taiwan’s Non‑Tech Industries

Intermediate | January 21, 2026

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Why the Taiwan U.S. trade deal matters

Lai’s message in plain English

Taiwan is famous for semiconductors, but on January 16, 2026, President Lai Ching-te said a new Taiwan–U.S. trade agreement should also help traditional (non-tech) industries—like manufacturing, consumer goods, and other exporters (Focus Taiwan). In short, the Taiwan U.S. trade deal isn’t only about semiconductors—it’s about helping more industries compete.

Why Taiwan cares about “fair competition”

Lai’s main point was simple: Taiwan’s non-tech companies have been competing at a disadvantage compared to countries like Japan and South Korea, which already have free trade or “quasi-free trade” arrangements with the U.S. He said the new deal would “level the playing field.” (Taipei Times)

What Changed: A Lower Tariff Rate

The number everyone is watching

Here’s the practical change Lai highlighted: the U.S. tariff rate on many Taiwanese goods would drop to 15%, down from 20%. (Focus Taiwan)

Why 5% can feel huge in business

That matters because a 5% difference can decide whether a buyer chooses your product or your competitor’s. That’s why the Taiwan U.S. trade deal could make a real difference for non-tech exporters. If Taiwan’s non-tech exporters face the same basic rate as other major U.S. trade partners, they can compete more fairly on price.

Still in Progress: The Deal Isn’t Fully Signed Yet

Not final—yet

Taiwan’s officials said a formal trade deal had not been signed yet, but they hoped to finalize it in the coming weeks. (Focus Taiwan)

Why companies hesitate until the ink is dry

This is important because it signals that the agreement is real, but still moving through the final steps. Businesses often watch this stage closely before making big decisions—like signing contracts, expanding production, or changing supply chains.

The Investment Side: “National Teams” and Business Support

The MOU: a “workable plan,” not just talk

Alongside tariff talks, Taiwan and the U.S. signed a memorandum of understanding (MOU) linked to investment commitments.

Lai said the U.S. would help Taiwanese companies acquire land and connect to utilities and infrastructure—the practical stuff companies need to actually build and operate in the U.S. He also used a memorable phrase: not only will Taiwan have a “Taiwanese national team” investing in the U.S., but there will also be a “U.S. national team” investing in Taiwan.

The headline investment figure

Separately, the U.S. Department of Commerce described the agreement as a strategic partnership to strengthen supply chains and said Taiwanese companies would make at least US$250 billion in new direct investments in U.S.-based production and innovation capacity (especially in semiconductors, energy, and AI). (U.S. Department of Commerce)

The Political Step: Taiwan’s Legislature Must Approve

One more gate before it’s official

Even if negotiators finalize the agreement, Taiwan still has a key checkpoint: legislative approval.

The 30-day rule—and why it matters

Under Taiwan’s Conclusion of Treaties Act, once a treaty is signed, the Cabinet must submit it to the Legislature within 30 days. (Taipei Times) Lawmakers can reserve or revise clauses, and if that happens, Taiwan would need to renegotiate with the other side.

Lai asked for nonpartisan support during the review process—because this kind of trade pact affects many industries, not just tech.

Why This Matters for English Learners

Business vocabulary in action

This story is a great way to practice business English because it uses common workplace language—like competition, investment, tariffs, and negotiations.

Quick speaking practice idea

Try summarizing this story in two sentences: (1) what changed, and (2) why it matters. Then explain it again in a slightly different way—like you’re telling a coworker at lunch. That’s real-world fluency training.

Vocabulary

Tariff (noun) – a tax placed on imported goods.
Example: “The tariff dropped from 20% to 15% under the agreement.”
Level the playing field (phrase) – to make competition fair for everyone.
Example: “Lower tariffs can level the playing field for Taiwan’s exporters.”
Competitor (noun) – a person or company you compete against.
Example: “Taiwanese firms compete with competitors from Japan and South Korea.”
Exporter (noun) – a company that sells products to other countries.
Example: “Non-tech exporters may gain new opportunities in the U.S. market.”
Memorandum of Understanding (MOU) (noun) – an agreement that outlines intentions, often before a final contract.
Example: “The two sides signed an MOU connected to investment commitments.”
Infrastructure (noun) – basic systems and services a country needs (roads, power, water, etc.).
Example: “Companies need infrastructure before they can build factories.”
Utilities (noun) – essential services like electricity, gas, and water.
Example: “The U.S. said it would help with land and utilities access.”
Nonpartisan (adjective) – not supporting one political party over another.
Example: “Lai asked for nonpartisan support when lawmakers review the pact.”
Renegotiate (verb) – to discuss again to change an agreement.
Example: “If lawmakers revise clauses, Taiwan may need to renegotiate.”
Commitment (noun) – a serious promise to do something.
Example: “The investment commitments were included in a separate MOU.”

Discussion Questions (About the Article)

Why did President Lai say the deal helps non-tech industries?
What does “level the playing field” mean in this situation?
Why can a 5% tariff difference matter for exporters?
What is an MOU, and why do governments use them?
Why does the Legislature’s approval process matter for trade deals?

Discussion Questions (About the Topic)

Should governments lower tariffs to help local exporters compete? Why or why not?
What are the pros and cons of moving investment and factories overseas?
How can trade deals affect small businesses compared to big companies?
What industries (besides tech) do you think Taiwan should strengthen globally?
If your country negotiates a trade deal, what protections should it include?

Related Idiom / Phrase

“Level the playing field” — to make rules fair so everyone competes equally.

Example: “Lai argued that the new tariff rate will level the playing field for Taiwan’s traditional industries in the U.S. market.”

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This article was inspired by: Focus Taiwan (CNA), Taipei Times, the U.S. Department of Commerce, and Reuters.