Taiwan is positioning itself as a strategic AI partner to the US under a new trade and investment agreement, Vice Premier Cheng Li-chiun said Friday. The deal, finalized Thursday, lowers tariffs on Taiwanese exports and encourages US investment in the island’s technology sector.

As part of the arrangement, Taiwanese companies plan to invest $250 billion in US semiconductors, AI, and energy production, including $100 billion already committed by TSMC in 2025. The Taiwanese government will back an additional $250 billion in credit to facilitate further private investment, according to US Commerce Secretary Howard Lutnick.

Cheng, who led the negotiations, described the deal as mutually beneficial and said it could also spur more US investment in Taiwan, the island’s key international partner and arms supplier.