The most important market and geopolitical story this week came out of Washington and Taipei, where the U.S. and Taiwan finalized a sweeping semiconductor trade deal.
- The U.S. agreed to cut tariffs on most Taiwanese goods to 15% from 20%
- In return, Taiwanese chip and tech companies committed $250B of investment into U.S. semiconductor manufacturing, backed by government credit guarantees
- The deal removes the threat of extreme chip tariffs and puts Taiwan on equal footing with Japan and South Korea
Semiconductors are the centerpiece.
- Tariff free chip import quotas are now tied to U.S. production capacity, directly incentivizing companies like TSMC to expand American fabs
- While many chips already enter the U.S. inside finished products, the structure clearly pushes future growth toward U.S. soil
The timing is not accidental.
- TSMC just reported strong AI driven earnings and lifted 2026 capex to $54B Shares hit record highs, pulling equipment suppliers higher as well
