UPSC Prelims Practice Questions — U.S., Taiwan reach trade deal focused on semiconductors

Q1. The U.S.–Taiwan trade deal of January 2026 focused on semiconductors was officially announced by which one of the following U.S. agencies?

  • A. Office of the United States Trade Representative
  • B. Department of Commerce
  • C. Department of State
  • D. Department of the Treasury

Q2. With reference to the U.S.–Taiwan trade deal announced in January 2026, consider the following statements: 1. The general tariff on most Taiwanese exports to the U.S. was reduced from 20% to 15%. 2. Taiwanese firms pledged $250 billion of investment in U.S. semiconductors, artificial intelligence and energy. 3. Generic pharmaceuticals and aircraft components face a 0% tariff under the deal. 4. The deal eliminates all U.S. tariffs on imported Taiwanese semiconductors. Which of the statements given above are correct?

  1. The general tariff on most Taiwanese exports to the U.S. was reduced from 20% to 15%.
  2. Taiwanese firms pledged $250 billion of investment in U.S. semiconductors, artificial intelligence and energy.
  3. Generic pharmaceuticals and aircraft components face a 0% tariff under the deal.
  4. The deal eliminates all U.S. tariffs on imported Taiwanese semiconductors.
  • A. 1, 2 and 3 only
  • B. 1, 3 and 4 only
  • C. 2 and 4 only
  • D. 1, 2, 3 and 4

Q3. With reference to the U.S.–Taiwan semiconductor trade deal of January 2026, consider the following statements: 1. The agreement expands the U.S.–Taiwan Initiative on 21st-Century Trade. 2. Taiwanese semiconductor producers investing in the U.S. receive preferential treatment in respect of tariffs flowing from a Section 232 investigation. 3. TSMC's Arizona Gigafab cluster is the flagship investment project under the deal. 4. The deal grants tariff-free access to all electronic exports from Taiwan to the U.S. Which of the statements given above is/are NOT correct?

  1. The agreement expands the U.S.–Taiwan Initiative on 21st-Century Trade.
  2. Taiwanese semiconductor producers investing in the U.S. receive preferential treatment in respect of tariffs flowing from a Section 232 investigation.
  3. TSMC's Arizona Gigafab cluster is the flagship investment project under the deal.
  4. The deal grants tariff-free access to all electronic exports from Taiwan to the U.S.
  • A. 1 and 2 only
  • B. 3 only
  • C. 2 and 4 only
  • D. 4 only

Q4. In the context of the January 2026 U.S.–Taiwan semiconductor trade deal, the term 'Section 232' refers to which one of the following?

  • A. A provision of the U.S. CHIPS and Science Act, 2022 that authorises subsidies exclusively to foreign chipmakers
  • B. A provision of the U.S. Trade Expansion Act, 1962 enabling the President to impose tariffs on imports on national-security grounds
  • C. A clause of the U.S.–Taiwan 21st-Century Trade Initiative governing investment screening of Chinese-origin equipment
  • D. A WTO safeguard provision allowing temporary emergency import restrictions on critical technology goods

Q5. Which one of the following is the lead Taiwanese semiconductor manufacturer driving the investment commitments under the January 2026 U.S.–Taiwan trade deal, with its Arizona Gigafab cluster designated as the flagship project?

  • A. United Microelectronics Corporation (UMC)
  • B. Taiwan Semiconductor Manufacturing Company (TSMC)
  • C. MediaTek
  • D. GlobalFoundries