Taiwan’s leader, Lai Ching-te, vowed to boost purchases and investment in the US as he rushed to respond to Donald Trump’s global tariff threats and pressure on the island’s semiconductor industry.
“We will increase investment in and purchases from the US to stabilize bilateral trade,” Lai Ching-te told reporters on Friday, hours after the US president announced plans to impose “reciprocal tariffs” on countries with which the US runs large trade deficits.
The trade deficit with Taiwan, the US’s seventh-largest trading partner, widened by $26.1 billion last year to $73.9 billion due to rising demand for cutting-edge artificial intelligence chips. Most of the chips are produced by Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chipmaker.
However, Lai emphasized Taiwan’s leading role in global chip manufacturing and opposed Trump’s demands that the semiconductor business be “returned to America.” Trump had previously accused Taiwan of “stealing the chip business from the US.”
“I want to emphasize that Taiwan, as the world’s strongest semiconductor [manufacturing] power, has the ability and willingness to respond to new situations,” Lai said. He pledged to “ensure Taiwan’s indispensability in the global supply chain” and proposed a “global semiconductor democratic supply chain initiative” to help the US build more resilient supply chains.
Following pressure from the first Trump and Biden administrations and US customers, TSMC committed to invest $65 billion in three production facilities in Arizona, the first of which is already in mass production. While these facilities will account for less than one-fifth of TSMC’s total capacity when completed, they will be the company’s largest overseas investment.
However, Trump has threatened to undo subsidy agreements made under his predecessor, a move that could jeopardize more than $6 billion in financial support for TSMC. Trump also wants to rebuild chip manufacturing in the US on a much larger scale. In announcing his latest tariff plans on Thursday, Trump repeated accusations that Taiwan is “taking away our chip business.” “We want that business back in the US,” he said, adding that “if they don’t bring it back, we won’t be very happy.”
A senior Taiwanese national security official said Taipei would support TSMC’s investments in the US.
“If TSMC, after their assessment, thinks this will help them globalize, we will of course help discuss this matter with the US side to negotiate the best possible outcome,” the official said. However, the official said any talks with Washington would need to find common ground. “Our high-tech industry, and TSMC in particular, is very important to our national security,” he emphasized.
Taiwan is rushing to fend off Donald Trump’s tariff threat.
Lai pledged to increase Taiwan’s defense spending from 2.5% of GDP to more than 3%, in another effort to win goodwill in Washington. Taipei is the US’s “most reliable trading partner,” Lai said, adding that the Trump administration is pursuing “completely different strategies and policies from the past,” which is creating challenges for all other countries, including Taiwan.
