Trump’s Tariff Threat: Taiwan terms chip business a ‘win-win’ as its response

U.S. President Donald Trump. File
| Photo Credit: Reuters

Semiconductor business between Taiwan and the United States is a “win-win” model for both sides given the high level of complementarity, the government said on Tuesday in response to tariff threats from U.S. President Donald Trump.

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Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), the island is a key link in the global technology supply chain for companies such as Apple and Nvidia.

Mr. Trump said on Monday (January 27, 2025) he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the United States.

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“Taiwan and the U.S. semiconductor and other technology industries are highly complementary to each other, especially the U.S.-designed, Taiwan-foundry model, which creates a win-win business model for Taiwan and U.S. industries,” Taiwan’s Economy Ministry said in a statement in response.

The Ministry “will continue to pay attention to U.S. policy going forward, and there will be close contact and cooperation between the two sides to ensure that Taiwan’s and U.S.’ industries and national interests can develop in a mutually beneficial way in the face of global challenges”.

Taiwan’s Presidential office, in a separate statement, said the island and the United States have “good mutual trust and a close relationship” when it came to chips and high-tech cooperation, which it also said was a “win-win situation”.

In 2020, under the first Trump administration, TSMC announced that it would build a $12 billion factory in Arizona in a win for efforts by the U.S. government to wrestle global tech supply chains back from China. It later boosted those plans with the total investment now standing at $65 billion.

TSMC declined to comment on Mr. Trump’s latest tariff remarks.

Earlier this month, Taiwan Economy Minister Kuo Jyh-huei said he only expected a small impact from any tariffs imposed by Mr. Trump on semiconductor exports given their technological superiority.

In another potential challenge for Taiwan, Trump last week directed federal agencies to investigate persistent U.S. trade deficits and unfair trade practices and alleged currency manipulation by other countries.

Taiwan’s trade surplus with the United States surged 83% last year compared with 2023, with exports to the U.S. hitting a record $111.4 billion driven by demand for high-tech products such as semiconductors.