THE CLOSE-KNIT U.S.-TAIWAN RELATIONSHIP

A major milestone such as AmCham Taiwan’s observance this year of the 75th anniversary of its founding is always a time for reflection — on past achievements, current trends, and future opportunities.

The Chamber is proud of the role it has played over the decades in helping deepen the U.S.-Taiwan relationship and contribute to Taiwan’s global economic competitiveness. The crowning moment came in December 1979 after the Carter administration announced its plan to shift formal diplomatic recognition from Taipei to Beijing. As the American embassy in Taiwan began winding down operations, AmCham (then AmCham Taipei) stepped into the vacuum and presented the U.S. Congress with policy recommendations that were soon incorporated into the Taiwan Relations Act, the bedrock of the robust bilateral relationship ever since. To preserve Taiwan’s attractiveness for investors, the Chamber also worked closely with the Taiwan government to enable U.S. community institutions such as the Taipei American School, American Club, and English-language radio station to continue operating smoothly despite the change at the diplomatic level.

That AmCham dedication and commitment has continued through the years. In the 1990s, it campaigned on behalf of Taiwan’s e orts for formal recognition as a valued member of the international trading community, leading to Taiwan’s accession to the World Trade Organization in January 2002. In recent decades, the Chamber’s advocacy for stronger intellectual property rights protection and good regulatory practice in Taiwan have benefited both domestic and multinational companies, as well as enhancing Taiwan’s global reputation as a reliable commercial partner.

Throughout, the Chamber has also recognized that for business to be successful, companies must operate with assurance of security for their personnel and property. AmCham has consistently called for appropriate American support to help ensure Taiwan’s ability to defend itself and deter any aggressive intent.

AmCham’s accomplishments have been facilitated by the great reservoir of friendship and goodwill between the two countries. Even when frictions have arisen — over particular trade practices, for example — the two sides worked diligently to narrow the gap.

Taiwanese affinity for the United States is the result of many years of smooth and mutually beneficial business engagement, common national security interests, the positive experience of many Taiwanese in attending American universities or working for American companies, shared values of democratic principles and human rights, and a host of cultural and people-to-people connections.

Just as much of the remarkable success of Taiwan’s most prominent enterprise, the Taiwan Semiconductor Manufacturing Co. (TSMC), maker of the world’s most advanced chips, has been attributed to the tight bonds of trust it developed with its corporate clients, a similar central core of mutual friendship and trust has persisted between the United States and Taiwan, despite the occasional challenges in their relationship.

That trait was exemplified earlier this year following the Trump administration’s declaration of its unprecedented reciprocal tariff policy, with its potential negative impact for Taiwan as a major trading economy. Overcoming the initial shock that it shared with most of the rest of the world, Taiwan put together a high-level negotiating team that entered into a series of rounds of candid talks with American counterparts.

What eventually emerged was an agreement satisfying both sides. Notably, several of the committee papers in this volume allude to the resulting U.S.-Taiwan Agreement on Reciprocal Trade (ART), commending it for reducing trade barriers and strengthening supply chain resilience. The agreement restored Taiwan’s market competitiveness by putting its U.S. tari s on an equal level with regional rivals, safeguarded Taiwan’s vital semiconductor sector from further tariff volatility, and provided trade protections for key traditional industries such as machine tools.

STRONG MOMENTUM

Some in both countries have gone so far as to refer to current bilateral conditions as a “golden age” in U.S.-Taiwan economic relations. The data bears out that assessment. Boosted by the close collaboration between Taiwanese and American tech companies in building artificial intelligence capabilities, Taiwan’s exports to the United States soared last year by nearly 35% and imports by almost 30% for total two-way trade of over US$256 billion. That made the United States Taiwan’s largest export market and number-one overall trading partner for the first time in years. At the same time, Taiwan surpassed Germany to become the fourth largest trading partner of the United States — the highest it has ever ranked. Only Mexico, Canada, and China did more business with the United States last year.

The momentum is continuing. Over the first four months of 2026, total U.S.-Taiwan trade registered another huge jump of some 70% year-over-year.

That explosive increase in trade volume, led by advanced semiconductors, servers, and other equipment to support the AI revolution, has been matched by massive growth in investments in both directions. Leading American tech giants such as AWS, Nvidia, Google, Microsoft, and Micron are carrying out large-scale new investment projects in Taiwan, chieRy AI-related. To help support the shipment and handling of the increasing quantity of cargo, both FedEx and UPS recently launched state-of-the-art new logistics hubs near the Taoyuan International Airport.

In the other direction, Taiwanese investment in the United States has been led by TSMC’s enormous project in Phoenix, Arizona — already in first-stage production and eventually due to consist of six chipmaking fabs employing some 12,000 people and amounting to US$165 billion in investment. The project has further established TSMC — and Taiwan — at the forefront of the global semiconductor industry and will tie the American and Taiwanese high-tech sectors even more closely together, with its “silicon shield” implications for Taiwan’s security.

Substantial expansion in the United States by Global-Wafers, MediaTek, and other Taiwanese companies — combined with Taiwan government plans to help fund and organize tech-oriented industrial parks in Arizona and Texas — will additionally cement the bilateral connection.

Underscoring that tighter economic partnership has been Taiwan’s participation in Pax Silica, the international strategic initiative launched by the Trump administration in late 2025, designed to secure and coordinate trusted global supply chains for advanced technologies. Originally invited as a “guest contributor,” Taiwan was soon recognized as an indispensable partner in light of its prowess in hardware manufacturing. Taiwan’s participation in the initiative is centering on the four strategic pillars of AI and non-China supply chains, critical minerals, digital infrastructure resilience, and drone and robotics integration.

REVIEWING PROGRESS

How can Taiwan best leverage its current robust relationship with the United States — frequently described as “rock-solid” by representatives of both governments — to assure continued dynamic economic performance and concomitant security going forward?

One crucial way for Taiwan to achieve that objective would be to act on the insights of companies with abundant on-the-ground experience operating in Taiwan — not only AmCham member companies but also those belonging to the European and Japanese chambers, as well as domestic industry associations. For AmCham, this annual Taiwan White Paper, now in its 31st edition, is just such a reference, designed to offer practical and constructive suggestions to Taiwan’s policymakers. It contains a total of 221 separate recommendations from a total of 24 committees and industry groups from the Chamber.

Each year when issuing the White Paper, AmCham reviews the progress made toward solving the issues raised the year before. This volume introduces a departure from the previous tracking methodology, which looked only at the broad suggestions o ered by committees (a maximum of five each) and not the numerous specific sub-issues within. In this 2026 edition, we have done both, as the top-line suggestions are often too general to be easily rated as resolved.

As shown in the charts elsewhere in this volume, a total of seven Suggestions out of the 237 proposed in the 2025 White Paper were found to have been fully resolved (see the sidebar for more details). More encouragingly, 49 of the issues were regarded as “showing good progress.”

The challenge for the coming one-year cycle will be to bring as many of those “good progress” issues to fruition as possible. Although all 221 of the specific suggestions in the present volume deserve serious consideration, AmCham would like to call the attention of the authorities to the following Priority Issues:

Economic Security, Trade, and Investment

• Collaborate closely with U.S. counterparts to ensure smooth implementation of the Agreement on Reciprocal Trade for the benefit of both sides. The ART offers the potential for deepened interaction between the two economies in terms of trade, investment, and supply The opportunity needs to be carefully nurtured.
• Update the foreign investment approval process and otherwise enhance the investment environment for foreign investors. The world and the way businesses are run have changed dramatically since Taiwan’s investment rules were last revised. It’s time to refresh them.
• Align with international standards and practices in policymaking, regulation setting, and legislation. Taiwan is an excellent market for many products and services, but not so large as to be able to go its own way without regard for accepted international norms and standards. Relative diplomatic isolation should not be allowed to hinder adoption of practices embraced by the world’s leading economies.

Energy and Infrastructure Resilience

• Treat energy sufficiency and grid resilience as national security issues. Year after year, energy supply reliability has been at or near the top of the concerns of respondents to AmCham Taiwan’s annual Business Climate Survey. Every industry sector, as well as the defense posture, is potentially impacted. The issue has been amplified by the AI-driven surge in demand and now the supply and cost pressures due to the war in Stakeholders require frequently updated energy roadmaps to guide their business decision-making.
• Build a resilience-by-design digital infrastructure across Digital technologies now underpin nearly all essential services. Safeguard critical infrastructure by embedding continuity, recoverability, and adaptability as core design principles.

Collaboration on Strategic Technologies

• Foster creation of a comprehensive ecosystem to facilitate AI development and application. With Taiwan poised to play a key role in the global AI transformation, ensure that the proper support is in place in terms of policy, infrastructure, and regulatory framework.
• Promote cooperation between the U.S. and Taiwan defense industries in developing drones and other asymmetric systems. American and Taiwanese defense companies have much to gain through innovative collaboration on development and production, in the process contributing to the security of both countries.

Governance, Talent, and Public Trust

• Improve the regulatory process for increased effective-ness and eflciency. AmCham committees are calling for better coordination among ministries and between the central and local governments, greater reliance on risk-based rather than rules-based regulatory frameworks, and regular consultation with stakeholders.
• Strengthen tax and other incentives to attract and retain highly-skilled professionals. Taiwan is in stiff competition with other countries in the drive for top talent to help propel the economy to the next Providing a financially and socially comfortable environment is vital.
• Enhance transparency and predictability in the National Health Insurance reimbursement-setting process for pharmaceuticals and medical Ensure that Taiwanese patients have timely access to the latest life-saving and life-prolonging therapies, while strengthening Taiwan’s advantages as a venue for international clinical trials.

In all of these areas, Am Cham looks for ward to close cooperation in the coming year with the relevant government ministries and agencies to bring about concrete progress for the benefit of all those living and working in Taiwan.