Taiwan’s lead tariff negotiator has rejected the proposal for the United States to have 50 percent of semiconductor production located within its borders. Vice Premier Cheng Li-chiun made this stance clear following discussions with US Secretary of Commerce Howard Lutnick. Cheng emphasized that the 50-50 split suggestion originated from the US side and was not a commitment made by Taiwan’s negotiation team.
Returning from Washington, Cheng reported progress in talks regarding US tariffs on Taiwanese shipments but highlighted that no agreement had been reached on the chip production split issue. The negotiation between Taiwan and the US is ongoing, particularly due to concerns stemming from the temporary 20 percent levy imposed by the Trump administration. President Trump had also hinted at imposing significant tariffs on semiconductor imports into the US.
Taiwan, a key player in semiconductor manufacturing, exports a significant portion of information and communication technology products, including chips, to the US. To mitigate the impact of tariffs, Taiwan has pledged to boost investments in the US, enhance energy purchases from the country, and increase defense spending to over three percent of its GDP.
Taiwan’s semiconductor industry is crucial globally, with the country accounting for more than half of the world’s semiconductor production, particularly in high-end chips. This concentration of chip manufacturing in Taiwan has strategic significance, acting as a protective barrier against potential threats from China, which claims Taiwan as part of its territory.
US officials have expressed the importance of having a substantial portion of Taiwan’s chip production located in the US to ensure national security and enhance domestic semiconductor supply. The goal is to increase the US market share in semiconductor production to 40-50 percent to meet domestic consumption needs effectively.