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Taipei to Consider Trump Threat of Big Tariffs on ‘Foreign Chips’

PM says: “We will urgently look at whether we need to make more cooperative plans and future assistance programmes for the industrial sector.”


A logo of taiwanese chip giant TSMC is seen at southern Taiwan science park in Tainan, Taiwan December 29, 2022.REUTERS/
The logo of Taiwanese chip giant TSMC is seen at a science park in Tainan in southern Taiwan. Photo: Reuters.

 

The Taiwanese government has said it will discuss if it needs to help its domestic chip sector after a threat by US President Donald Trump to put tariffs on semiconductors.

Premier Cho Jung-tai gave a cautious response on Wednesday to Trump’s remark on Monday that he plans to impose tariffs on imported semiconductors, pharmaceuticals and steel – in a bid to get producers to make them in the US.

A report by Tom’s Hardware said Trump had threatened major tariffs – ranging from “25%, 50% or even a 100% tax” – to encourage chipmakers to return to US shores.

 

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“The new US President also took the opportunity to criticize American tech giants like Apple, AMD, Nvidia, and Qualcomm for sending all their chip production business to TSMC in Taiwan,” it said.

“Additionally, he slated his predecessor’s “ridiculous programme” (the CHIPS Act) for wastefully awarding semiconductor giants billions of dollars to set up and expand in the US.”

Taiwan is home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC), and a key link in the global technology supply chain for companies such as Apple and Nvidia. It has also just begun making 4-nanometre chips at its new Arizona plant in the US.

TSMC has yet to issue a formal statement.

But the PM, Cho, responded to a question on Trump’s remarks, saying the economy ministry and other departments have been paying close attention to the “developments of the past few days.”

“In a day or two we will urgently look at whether we need to make more cooperative plans and future assistance programmes for the industrial sector,” he added.

“I would like to reassure our compatriots that Taiwan’s position in the world’s industrial chain is not to be ignored, and that we will continue to maintain such an advantage.”

 

‘Strive for more external cooperation’

Taiwan has to continue to strive for more cooperation externally and to maintain its leadership in the industrial and technological sectors, Cho added.

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 US 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 has declined to comment on Trump’s latest tariff remarks.

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

In another potential challenge for Taiwan, Trump last week directed federal agencies to investigate persistent US 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 US hitting a record $111.4 billion driven by demand for high-tech products such as semiconductors.

 

  • Reuters with additional input and editing by Jim Pollard

 

NOTE: Minor updates were made to this text on January 29, 2025.

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.