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U.S. And Taiwan Sign Historic Trade Deal To Boost Economic Ties

Overview

The United States and Taiwan have entered a major trade agreement that reshapes their economic relationship and lowers tariffs on Taiwanese exports to a uniform 15%. The new rate places Taiwan on par with key Asian trading partners such as Japan and South Korea and signals a broader strategic alignment between Washington and Taipei.

Tariff Reductions And Expanded Market Access

Under the deal, Taiwan will remove or significantly reduce tariffs on 99% of U.S. goods, opening the door to wider access for American industrial and agricultural exports. Sectors expected to benefit include automobiles, beef, and raw materials. The Office of the U.S. Trade Representative also confirmed that several long-standing non-tariff barriers will be addressed, including additional compliance requirements for U.S. vehicles that already meet federal safety standards.

Commitments To Significant U.S. Purchases And Investments

Taiwan has pledged to purchase more than 84 billion dollars’ worth of American goods between 2025 and 2029. Planned imports include liquefied natural gas, crude oil, aircraft, and energy equipment. In parallel, Taiwanese semiconductor and technology firms have announced intentions to invest at least 250 billion dollars in expanding production capacity within the United States, supported by government incentives outlined earlier this year.

Navigating Semiconductor Supply Chain Challenges

The semiconductor dimension of the agreement has sparked the most debate. U.S. Commerce Secretary Howard Lutnick warned that companies choosing not to localize production could face tariffs of up to 100%. The proposal forms part of a wider effort to shift as much as 40% of Taiwan’s semiconductor supply chain to U.S. soil. Taiwanese officials, including Vice Premier Cheng Li-chiun, have pushed back, arguing that relocating such a deeply integrated ecosystem could disrupt global markets and damage domestic industry.

Geopolitical And Strategic Implications

The trade pact arrives against a sensitive geopolitical backdrop. Although the United States does not maintain a formal defense treaty with Taiwan, the 1979 Taiwan Relations Act commits Washington to supporting the island’s defensive capabilities. Recent approval of an 11.15-billion-dollar arms package has intensified tensions with Beijing, which views the growing economic and security ties as a challenge to regional balance.

Taiwan now finds itself balancing increased foreign investment and closer cooperation with the United States against the need to preserve its core technology industries at home. The outcome of this balancing act will likely shape not only bilateral trade flows but also the broader dynamics of economic power in the Asia-Pacific region.

Copyright Law Struggles To Keep Up With AI Training

Courts Are Still Applying Old Copyright Rules To AI

AI companies train models on enormous amounts of published material, including books, articles and academic research. Whether using that content without authors’ permission violates copyright law remains unresolved.

Much of the debate centres on fair use, which allows copyrighted material to be used without permission in certain circumstances. Courts consider factors such as the purpose of the use, how much material was involved and its impact on the original market.

Anthropic Case Sets An Important Precedent

A major case involving Anthropic and a group of authors provided one of the clearest rulings so far. Judge William Alsup found that using copyrighted books to train AI models was lawful, comparing the process to people reading and studying literature before creating something new.

Anthropic was nevertheless ordered to pay $1.5 billion in a settlement. The penalty concerned books the company had obtained from illegal online libraries rather than the AI training itself.

For AI companies, that distinction could prove significant because it separates studying copyrighted material from directly copying it.

Competition Could Be The Key Issue

A case involving Thomson Reuters and Ross Intelligence offers a different perspective. A court ruled that Ross could not claim fair use after using Reuters’ copyrighted material to develop a competing AI-powered legal research platform.

The decision suggests courts may be less willing to consider AI training fair use when copyrighted content is used to build a product that directly competes with the original.

For authors, an unresolved question is whether AI-generated content should be considered competition for the works used to train these models.

The Law Has Yet To Catch Up

US copyright law predates generative AI by decades, leaving courts to apply old principles to new technology. Questions also remain over copyright protection for AI-generated works. In Thaler v. Perlmutter, a court ruled that material created entirely by AI cannot receive copyright protection.

Major AI companies remain involved in copyright litigation, and different courts could reach different conclusions. For now, there is no universal rule: the legality of AI training will depend on the circumstances of each case and how courts ultimately interpret copyright and fair use.

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