The Trump Administration is working on a new trade deal with Taiwan, which includes Taiwan Semiconductor Manufacturing (TSM), the world’s largest chipmaker, building more facilities in the U.S., according to the New York Times.
TSMC shares were up 1.4% during early afternoon trading on Monday.
The new agreement, which has been negotiated for months, would reduce the U.S. tariff rate to 15% for goods exported from the island nation, the report said. The deal would also require TSMC to build five more manufacturing sites in Arizona.
Imports from Taiwan are currently at a 20% tariff rate. However, semiconductors and other electronic products have been exempt due to national security issues, placing them under Section 232, which is part of the Trade Expansion Act of 1962. They have been under a separate investigation by the U.S. Chamber of Commerce for about a year.
The Trump Administration has indicated in the past that it might exclude companies from Section 232 tariffs if they significantly invest in U.S. facilities.