TAIPEI (Taiwan News) — The US is close to reaching an agreement with Taiwan to lower tariffs on Taiwanese imports from 20% to 15%, the Cabinet’s Office of Trade Negotiations said Monday, following a similar report by The New York Times.

If finalized, the reduced tariff rate would place Taiwan on par with Japan and South Korea, which currently enjoy more favorable US trade terms. Reports also indicate the broader trade package could include a commitment by TSMC to build at least five additional semiconductor fabs in Arizona, per CNA.

In a press release, the Office of Trade Negotiations said Taiwan’s objective throughout the talks has been to reduce reciprocal tariffs without additional levies being stacked on top, and to secure preferential treatment for semiconductors and related products under Section 232 of US trade law.

Section 232 is a legal provision that covers items associated with national security, with Taiwan seeking an exemption for semiconductors and various electronic products. In the past, Section 232 has been applied to steel, aluminum, cars, copper, lumber, and other goods.

The office said an agreement is imminent after five rounds of in-person negotiations between Taiwan and the US, followed by video conferences and written exchanges. Talks have entered a second phase focused on supply-chain cooperation under the “Taiwan model,” including coordination with the US Department of Commerce to assist Taiwanese companies with land acquisition, utilities, visas, and other needs to create a favorable investment environment.

After a Taiwan-US wrap-up meeting, both sides will jointly announce the main elements of the agreement, the office said. The government will also brief the legislature and the public on the negotiations and the deal’s contents, and will submit the complete agreement text and an impact assessment to the legislature for review in accordance with legal procedures.

TSMC has completed one semiconductor fab in Arizona since 2020, with a second fab nearing completion and expected to begin production in 2028. The company has previously pledged to build four fabs in the United States, but reports tied to the ongoing negotiations suggest the total number of new fabs would rise to five.