Despite the absence of formal diplomatic ties, Taiwan remains one of America’s most important and reliable partners. As the United States reorients its global economic and security posture to prioritize domestic strength, fair trade, and strategic self-reliance, Taiwan stands out for the tangible value it delivers to American interests. As a like-minded friend to the United States, Taiwan plays the role of:

Frontline partner in the Indo-Pacific. Located at the heart of the first island chain, Taiwan occupies a pivotal role in safeguarding peace and deterring regional aggression. As a vibrant democracy on the front lines of Chinese military expansion, Taiwan is not only a trusted democracy committed to shared values but a strategic asset of growing importance to the United States. In an era of intensifying geopolitical rivalry, Taiwan’s geographic position offers significant operational advantages to U.S. and allied forces seeking to uphold a free and open Indo-Pacific. Its proximity to key maritime chokepoints and critical sea lines of communication makes it indispensable to regional stability and global commerce.

Equally important is Taiwan’s growing security cooperation with regional partners, including Japan and the Philippines. These emerging trilateral ties complement the U.S. Indo-Pacific strategy by creating a more resilient security architecture that enhances deterrence without requiring substantial new American troop deployments.

Investor and job-creator in U.S. industry. Taiwan is a prominent investor in the U.S. economy, with cumulative foreign direct investment reaching US$21.5 billion as of 2023. In 2024, Taiwan invested an additional US$13.97 billion in the United States, accounting for 30.8% of Taiwan’s total outbound investment. Moreover, Taiwan held approximately US$295 billion in U.S. Treasury securities as of early 2025, ranking among the top 10 foreign holders and contributing to U.S. financial stability.

Taiwanese companies are creating American jobs. Taiwan Semiconductor Manufacturing Co. (TSMC) alone has committed to US$165 billion in investment projects in the United States. TSMC’s world-class semiconductor facilities will produce advanced chips to supply U.S. aerospace, defense, automotive, and tech industries.

The new fabs are expected to directly create 6,000 high-tech jobs and tens of thousands more in supporting industries. Taiwanese companies are also bringing capital and know-how to sectors such as energy, photonics, electric vehicle components, and precision manufacturing, particularly in states across the Midwest and Southwest.

Notable customer. Taiwan is a major buyer of U.S. goods, ranking as America’s seventh-largest merchandise trading partner, with US$158.6 billion in two-way trade in 2024 – a year-over-year increase of 24.2% and exceeding trade with much more populous countries, such as India and Brazil. Moreover, Taiwan is the United States’ eighth-largest market for agricultural products and the United States is Taiwan’s top agricultural trade partner, accounting for about 37% of the island’s agricultural imports. In fact, the United States enjoys an agricultural trade surplus of about US$3 billion with Taiwan. Taiwan is also investing in advanced U.S. technologies and sourcing key defense and energy equipment from American suppliers.

Supply chain stabilizer. The global pandemic and growing strategic rivalry with China have revealed the dangers of concentrated, unreliable supply chains. By contrast, Taiwan has emerged as a trusted, indispensable source of mission-critical technologies. Taiwan supplies more than 90% of the world’s most advanced chips, used in everything from military hardware to electric vehicles. American companies collaborate closely with Taiwan’s semiconductor, biotechnology, and ICT industries to protect intellectual property, ensure quality, and reduce dependence on adversarial nations throughout global supply chains.

Ally in shared values. While strategic and economic interests often take priority, it is also worth noting that Taiwan respects the rules of international commerce, upholds contract sanctity, protects intellectual property, and invests heavily in U.S. industries. It is a partner that contributes – not a competitor that undercuts.

Amid rising global uncertainty and strategic competition, Taiwan stands out as a partner that consistently aligns with U.S. interests, supports American industry, and reinforces a transparent economic environment.

To maintain a favorable environment for U.S. companies and further strengthen the broader U.S.-Taiwan relationship, AmCham Taiwan calls on the U.S. government to take the following actions:

1. Ensure continued sufficient support for Taiwan’s defense. Taiwan plays an indispensable role in countering aggression and maintaining stability in the Indo-Pacific. Its geographic location makes it a vital partner in resisting expansionist threats.
   Taiwan is taking meaningful steps to shoulder its share of the regional security burden. Over the past two years, Taiwan has acted to bolster its defense, including increasing its military budget, extending conscription, and overhauling its reserve system. Meanwhile, private-sector groups have initiated civil defense programs. President Lai Ching-te’s administration has committed to raising annual defense spending to at least 3% of GDP, a level that exceeds that of many NATO allies. This investment reflects not just rhetorical resolve but sustained action.
   Washington has responded with over US$30 billion in approved arms sales since 2019, covering critical capabilities such as F-16V fighter jets, Harpoon coastal defense systems, and advanced air and missile defense platforms, including Stingers and Patriot systems. These acquisitions are enhancing Taiwan’s deterrence posture and interoperability with U.S. and allied forces and warrant stronger American support – not only through arms deliveries but also by integrating Taiwan into the U.S. defense industrial base and coordinating deterrence strategies with like-minded allies such as Japan and the Philippines.
   Taiwan has clearly demonstrated its commitment to purchasing U.S. military equipment through both Foreign Military Sales and Direct Commercial Sales. For its part, the U.S. government should ensure the timely delivery of these arms, streamline bureaucratic processes, and prioritize Taiwan’s defense needs within existing production schedules.
   Additionally, America should support the integration of Taiwanese companies into U.S. defense supply chains, where appropriate, ensuring that economic cooperation reinforces national security for both. Strengthening defense-industrial collaboration will not only enhance Taiwan’s self-defense capabilities but also help fortify the resilience and scalability of the U.S. defense infrastructure.
2. Prioritize high-level visits. U.S. cabinet officials should be encouraged to visit Taiwan regularly to advance concrete outcomes, including defense coordination, trade negotiations, and tech sector development. These visits, focused on results, align with U.S. interests and reduce unnecessary controversy. The goal, however, is not symbolism but strategic action and follow-through on shared priorities.
   Regular visits by cabinet members reaffirm the strength of the U.S.-Taiwan relationship and signal a commitment to mutual economic and security interests. High-level visits are not provocative when they become routine. In fact, during the 1990s, such visits occurred every two years with little more than a diplomatic response from Beijing. The last cabinet visit was in January 2021 by Health and Human Services Secretary Alex Azar, although members of Congress and state governors continue to visit frequently.
   These visits are invaluable, cementing bilateral ties and creating opportunities for cooperation in areas critical to both economies, such as energy, climate, healthcare, and transportation. Ongoing high-level exchanges with Taiwan foster alignment and drive meaningful policy advancements that benefit American businesses and global stability.
3. End double taxation. Outdated tax rules are hindering Taiwanese companies from expanding their operations in the United States. For the more than 1,000 small and medium-sized enterprises (SMEs) integral to TSMC’s supply chain, double taxation presents a significant barrier to establishing production facilities in America.
   In response, the U.S. House of Representatives passed the United States-Taiwan Expedited Double-Tax Relief Act (H.R. 33) on January 15, 2025, with overwhelming bipartisan support – 423 votes in favor to 1 against. This legislation aims to alleviate double taxation by extending treaty-like benefits to qualified Taiwanese companies and residents, and authorizing the President to negotiate a formal tax agreement with Taiwan. The bill is currently under consideration in the Senate, and stakeholders remain optimistic that it will be taken up later in the year, potentially as part of a larger legislative package.
   A bilateral tax agreement would accelerate Taiwanese investment in the United States, particularly in the semiconductor sector, by eliminating outdated tax barriers, unlocking investment from Taiwanese SMEs, and reinforcing the resilience of the semiconductor supply chain.
   This legislative initiative has garnered strong support from both American and Taiwanese business communities. The U.S. Chamber of Commerce has endorsed H.R. 33, highlighting its potential to remove tax barriers and stimulate cross-border trade and investment. President Lai has likewise emphasized the importance of resolving double taxation issues to support the development of integrated industry clusters and drive job creation.
   The United States maintains comprehensive income tax agreements with 66 countries, helping to attract substantial foreign direct investment. In 2019, during President Donald Trump’s first term, America and Switzerland updated their tax treaty, facilitating greater Swiss investment and supporting job creation and economic growth. The absence of a tax agreement between the United States and Taiwan stands out, especially given the deepening economic and technological ties between the two.
   Considering the benefits that both economies would derive from this legislation, as well as the symbolic value its passage would represent for U.S.-Taiwan relations, we request speedy action in Washington to move this legislation across the finish line.
4. Conclude a comprehensive, reciprocal trade agreement with Taiwan. A trade agreement between the United States and Taiwan, centered on eliminating trade barriers and advancing key areas like technology transfer, intellectual property protection, and supply chain security, would not only benefit both economies but also reinforce the role of the United States as a global leader in shaping the landscape of modern trade. By focusing on jobs, fair competition, and good regulatory practices, such an agreement could set a benchmark for future trade deals, ensuring that American workers and businesses are positioned to thrive in an increasingly competitive global market.
   There is growing bipartisan support in Congress for finalizing a trade agreement with Taiwan. This momentum is driven not only by the economic opportunities but also by a rising awareness of the national security implications tied to a closer economic partnership. As tensions in the Indo-Pacific region continue to escalate, strengthening trade relations with a crucial partner in the region becomes a strategic imperative. A robust trade agreement would bolster Taiwan’s resilience, advance its economic autonomy, and fortify our mutual defense and security interests.
   Such an agreement would also send an unmistakable message to adversaries that the United States will not stand idly by when it comes to working with allies and safeguarding its economic dominance. It is time to act decisively, solidifying leadership in a trade partnership that reflects the strength and determination of America’s interests on the world stage.
5. Support practical international participation. Taiwan makes vital contributions to global public health and aviation safety. The United States should continue to support Taiwan’s meaningful participation in international organizations such as the World Health Assembly (WHA) and the International Civil Aviation Organization (ICAO).
   Beijing’s objections have barred Taiwan from many multilateral bodies, often with serious consequences for its 23 million citizens and broader international coordination. While full membership may not always be possible, Taiwan has sought observer status to gain basic access to critical, potentially life-saving information and collaboration. AmCham Taiwan appreciates U.S. efforts to support this goal and encourages continued advocacy in organizations that do not require statehood for participation.
   Taiwan’s swift, effective pandemic response and its donation of critical supplies to countries around the world, including the United States, demonstrated its commitment to global health. Yet it remains locked out of the WHA. Meanwhile, its exclusion from ICAO creates alarming gaps in air safety coordination, while being shut out of Interpol hampers international law enforcement efforts.
   The United States has voiced consistent support for expanding Taiwan’s engagement in these forums. Considering that the World Trade Organization – the rare international body in which Taiwan enjoys full membership – has lost much of its former influence in shaping global norms, it is even more important that the United States more actively pursue alternative platforms and multilateral initiatives that can elevate Taiwan’s international presence and contributions. The stakes are not only diplomatic but reflect urgent concerns for global health, safety, and security.