Taiwan Considers Help for Chip Industry Following US Tariff Threat

Premier of the Republic of China (Taiwan) Cho Jung-tai (C) addresses the public's concern over the Chinese man who took a speedboat into Taipei pier, in front of the Legislative Yuan on June 11, 2024. Sung Pi-Lung/The Epoch Times

Taiwan’s ministers will discuss whether help is needed for the semiconductor industry, Premier Cho Jung-tai said on Wednesday following U.S. President Donald Trump’s latest tariff threat.

On Monday, Trump told House Republicans at an annual retreat that he will soon impose tariffs on foreign-made computer chips, semiconductors, and pharmaceuticals in order to bring manufacturers of these essential goods to the United States, and he singled out Taiwan as an example.

“They left us and they went to Taiwan, which is about 98 percent of the chip business,” he said. The president also promised tariffs on steel and other products needed for military purposes.

Visiting a temple on the Chinese New Year’s Day on Wednesday, Cho told reporters that the Ministry of Economic Affairs (MOEA) and other government departments have been paying close attention to the development.

“In a day or two, we will take an urgent look at whether we need to make more cooperative plans for the industry,” he said.

The premier sought to reassure the public, saying Taiwan’s position in the global semiconductor supply chain industrial chain is not to be ignored. He promised the government would continue to maintain the advantage. 

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.

In 2020, TSMC announced plans to build a $12 billion factory in Arizona as the first Trump administration sought to wrestle global tech supply chains back from China. It later boosted those plans with the total investment now standing at $65 billion.

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

However, Trump has criticized the act, saying it’s better to use tariffs instead of subsidies to bring factories to the United States.

On Wednesday, Trump’s nominee for commerce secretary Howard Lutnick said during his confirmation hearing he plans 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 told 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 on Tuesday, Taiwan’s government said semiconductor trade between Taiwan and the United States is a “win-win” model for both.

“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,” the MOEA said in a statement.

The ministry said it “will continue to pay attention to U.S. policy going forward,” and there will be close bilateral cooperation to ensure that the industries and national interests of Taiwan and the United States “can develop in a mutually beneficial way in the face of global challenges.”

In a separate statement, President Lai Ching-te’s office said Taiwan and the United States have “good mutual trust and a close relationship” when it comes to chips and high-tech cooperation, which it also said was a “win-win situation.”

Reuters contributed to this report.