A significant multi-billion-dollar trade agreement was signed with Taiwan by the Trump administration, aimed at strengthening domestic semiconductor production in the United States. Announced by the U.S. Department of Commerce on Thursday, the deal commits Taiwanese semiconductor and technology firms to direct investments totaling $250 billion into the U.S. semiconductor sector.

These funds will support advancements in semiconductors, energy, and artificial intelligence, focusing on both production and innovation. Taiwan, which manufactures over half of the world’s semiconductors, will also provide an additional $250 billion in credit guarantees to facilitate further investments from its tech companies. The exact timeline for these investments remains unspecified.

In exchange, the United States has pledged to invest in Taiwan’s semiconductor, defense, artificial intelligence, telecommunications, and biotechnology industries. No specific dollar amount for the U.S. commitments was detailed in the announcement.

This development follows a proclamation issued the previous day by the Trump administration, which reaffirmed the goal of increasing semiconductor manufacturing within the United States. The document acknowledged that this shift would require time, noting that only 10% of semiconductors are currently produced domestically.

The proclamation highlighted concerns over reliance on foreign supply chains, describing it as a substantial economic and national security vulnerability. It emphasized that semiconductors are critical to both the modern economy and national defense, warning that disruptions to import-dependent supplies could weaken U.S. industrial and military capacities.

Additionally, the proclamation introduced 25% tariffs on certain advanced artificial intelligence chips. It indicated that further semiconductor tariffs would be implemented once trade discussions with other nations—including this new agreement with Taiwan—are finalized.