Key Takeaways
1. Trump criticized financial support for foreign chip manufacturers and emphasized a tough trade stance during his presidency.
2. He warned TSMC of a potential 100% tax if they did not build factories in the U.S., contrasting with the current administration’s $6.6 billion subsidy for TSMC in Arizona.
3. TSMC plans a $100 billion investment in the U.S., including five new factories.
4. Taiwan is engaging in diplomatic talks with the U.S. to address tariff threats and has proposed zero tariffs and increased investment.
5. Taiwan’s stock market is volatile, prompting the government to activate a $15 billion stabilization fund to support investor confidence.
U.S. President Donald Trump has ignited renewed discussion regarding trade ties between the U.S. and Taiwan, particularly focused on semiconductor manufacturing strategies. As reported by Reuters, Trump expressed strong opinions during an event for the Republican National Congressional Committee, where he critiqued the government’s financial support for foreign chip manufacturers and shared insights on his tough stance while in office.
Trump’s Warning to TSMC
At this gathering, Trump disclosed that he had cautioned Taiwan Semiconductor Manufacturing Company (TSMC) about a possible tax reaching as high as 100 percent if the company failed to build its factories in the U.S. In contrast to the present administration’s decision to grant TSMC’s American division a $6.6 billion subsidy for expanding its operations in Arizona, Trump noted that he provided no monetary aid, instead relying on taxation to drive his agenda. TSMC had earlier confirmed a substantial investment plan of $100 billion in the U.S., which involves constructing five new factories.
Diplomatic Efforts by Taiwan
In light of Trump’s tariff threats, officials from Taiwan indicated that they have begun talks with Washington to address the issue through diplomatic means. The Director-General of Taiwan’s National Security Bureau confirmed that there is “strategic communication” happening with U.S. representatives, with the goal of establishing a negotiation pathway that avoids any retaliatory actions. Taiwan has proposed zero tariffs, an increase in investment, and procurement in the U.S. as a way to ease tensions.
Market Reactions and Stability Measures
Meanwhile, a report from Investing highlighted that Taiwan’s stock market has been experiencing fluctuations due to these developments, leading the government to activate a $15 billion stabilization fund to bolster investor confidence. While TSMC shares remained steady, significant suppliers like Foxconn faced noticeable drops in their stock prices.
