Taiwan Contemplates Support for Semiconductor Sector Amidst US Tariff Warning

January 29, 2025 TruthUSA

The premier made it clear that urgent discussions will be held by ministers to determine if Taiwan’s semiconductor industry needs assistance due to potential tariffs.

Following U.S. President Donald Trump’s latest tariff threat, Premier Cho Jung-tai stated that Taiwan’s ministers will deliberate on the necessity of aid for the semiconductor industry.

On Monday, Trump revealed his plans to impose tariffs on foreign-made computer chips, semiconductors, and pharmaceuticals to incentivize manufacturers of these vital goods to operate in the United States, singling out Taiwan as an example.

“They left us and they went to Taiwan, which is about 98 percent of the chip business,” he stated. Trump also mentioned tariffs on steel and other products essential for military purposes.

While visiting a temple on Chinese New Year’s Day, Cho informed reporters that the Ministry of Economic Affairs (MOEA) and other government departments are closely monitoring the situation.

“In a day or two, we will urgently assess whether further cooperative plans are required for the industry,” he added.

The premier reassured the public that Taiwan’s position in the global semiconductor supply chain is significant and pledged that the government will continue to uphold this advantage.

Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC) plays a crucial role in the global technology supply chain for companies like Apple and Nvidia.

In 2020, TSMC unveiled plans to construct a $12 billion factory in Arizona, initially during the Trump administration’s efforts to relocate global tech supply chains from China. This plan was later expanded, with a current total investment of $65 billion.

Under the CHIPS and Science Act, the Biden administration committed $6.6 billion in direct funding and up to $5 billion in loans to TSMC Arizona in November 2024.

However, Trump has criticized the act, advocating for tariffs over subsidies to attract factories to the United States.

During a confirmation hearing, Trump’s nominee for commerce secretary Howard Lutnick expressed his intention to review the Biden-era subsidies for chip makers.

“I think they’re an excellent down payment as a structure. I think we need to get it right,” Lutnick stated to the Senate Committee on Commerce, Science, and Transportation. “I think we need to review them and get it right. But as the way that Congress has said it, it’s an excellent down payment in our ability to bring semiconductor manufacturing back to America.”

Reacting to Trump’s tariff threat, Taiwan’s government affirmed that semiconductor trade between Taiwan and the United States benefits both parties.

“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,” stated the MOEA in a release.

The ministry pledged to “continue to pay attention to U.S. policy going forward” and assured close bilateral cooperation to ensure mutual growth for the industries and national interests of Taiwan and the United States in the face of global challenges.

In a separate statement, President Lai Ching-te’s office highlighted the strong mutual trust and close relationship between Taiwan and the United States in terms of chips and high-tech cooperation, emphasizing the benefits of such collaboration.

Reuters contributed to this report.

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