Economy January 27, 2026

Taiwan and U.S. Advance AI, Semiconductor and Drone Cooperation at High-Level Economic Forum

Sixth round of the Economic Prosperity Partnership Dialogue yields agreements on supply-chain security, drone certification and economic cooperation

By Hana Yamamoto
Taiwan and U.S. Advance AI, Semiconductor and Drone Cooperation at High-Level Economic Forum

Senior officials from Taiwan and the United States met for the sixth U.S.-Taiwan Economic Prosperity Partnership Dialogue, discussing collaboration on artificial intelligence, semiconductors, drones and critical minerals. The talks produced joint statements including the Pax Silica Declaration and a U.S.-Taiwan economic security cooperation agreement, and addressed supply chain security, investment barriers and responses to economic coercion.

Key Points

  • High-level talks produced joint statements on the Pax Silica Declaration and U.S.-Taiwan economic security cooperation, highlighting focus on AI and semiconductor supply chains - sectors: semiconductors, AI, technology manufacturing.
  • Dialogue covered drone component certification and cooperation on critical minerals, indicating regulatory and resource aspects of defense-related technology supply chains - sectors: defense technology, mining, electronics.
  • Discussions targeted trade and investment barriers, including tax issues and tariff reductions, with the aim of increasing bilateral investment and cross-border industrial activity - sectors: trade, foreign direct investment, manufacturing.

Senior representatives from Taiwan and the United States met this week for the sixth round of the U.S.-Taiwan Economic Prosperity Partnership Dialogue, focusing on cooperation in artificial intelligence, technology and drone systems, the U.S. State Department said on Tuesday.

The forum, which was launched during the first Trump administration and first convened in November 2020, brought together officials led by Under Secretary for Economic Affairs Jacob Helberg on the U.S. side and Taiwan Economy Minister Kung Ming-hsin, who was visiting the United States for the talks.

In a statement, the State Department described Taipei as a "vital partner" and said the session resulted in the signing of statements related to the Pax Silica Declaration - a U.S.-led initiative to secure AI and semiconductor supply chains - and a separate agreement on cooperation in economic security between the two sides.

"Taiwan is a vital partner on these and other important economic initiatives and its advanced manufacturing sector plays a key role in fuelling the AI revolution," the State Department said in its release.

Participants discussed a range of supply chain issues tied to AI and semiconductors, as well as technical and regulatory aspects of drone systems. The talks included exchanges on certification for drone components and cooperation on critical minerals, the statement said.

Officials also reviewed efforts to counter economic coercion, to expand cooperation by Taiwanese and U.S. entities in third countries and to address tax-related barriers that the two sides say are impeding investment flows. The State Department said those conversations highlighted "progress in responding to economic coercion, pursuing mutual cooperation in third countries and addressing tax-related barriers to increase investment between the United States and Taiwan."

Taiwan, a major producer of advanced semiconductors that underpin AI computing, has repeatedly sought an agreement to avoid double taxation, arguing such a pact would help raise bilateral investment.

Earlier this month, Taiwan and the United States reached a separate arrangement to reduce tariffs on Taiwanese exports to the U.S. and to encourage greater Taiwanese investment in U.S. semiconductor manufacturing and other sectors.

China routinely objects to official contacts between Taiwanese and U.S. officials, asserting that Taiwan is an internal matter and describing such interactions as a red line. Taiwan's government rejects Beijing's sovereignty claims and maintains that decisions about the island's future belong solely to its people.


Summary

The two governments used the sixth Economic Prosperity Partnership Dialogue to deepen cooperation on AI-related supply chains, semiconductor security, drone component certification and critical minerals. The meeting produced statements including the Pax Silica Declaration and an economic security cooperation agreement, while also addressing tariff reductions, tax barriers and actions to counter economic coercion.

Risks

  • China objects to official interactions between U.S. and Taiwanese officials, a diplomatic friction that could affect regional trade and geopolitical risk assessments - markets impacted: international trade, defense contractors.
  • Outstanding tax-related barriers remain unresolved; absent an agreement to avoid double taxation, bilateral investment flows could be constrained - markets impacted: foreign direct investment, semiconductor capital expenditure.
  • Supply chain vulnerabilities for AI and semiconductor production persist, requiring ongoing coordination; certification and resource cooperation could face technical and regulatory delays - markets impacted: semiconductor supply chain, critical minerals market.

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