US President Donald Trump has threatened Taiwan’s tech industry with tariffs of 25% to 100% on exports to the US. According to Newsweek, Trump is unhappy about US investment in foreign semiconductor manufacturers via the CHIPS and Science Act. He said that the tariffs would incentivize Taiwanese chipmakers to pay for their own US-based semiconductor fabrication facilities.
In one of the largest foreign investments in the history of US chipmaking, Taiwan Semiconductor Manufacturing Company (TSMC) is currently building three semiconductor plants in Arizona at a cost of some US$65 billion. The Taiwan-based manufacturer is set to receive up to US$6.6 billion in US Government funding for the project and the first facility is slated to begin 4-nanometer chip production in early 2025.
The US-based Technology and Innovation Foundation thinktank told the news outlet: “[If] Trump raised tariffs on imported Taiwanese chips to 100 percent, it wouldn’t drive Taiwanese semiconductor and electronics firms to America. Instead, the policy would unleash a global, cross-sector tariff war that would boost costs for Americans, hurt American tech firms, and damage relations with a key US ally at a vital time.”
The thinktank said that the threatened tariffs could drive manufacturers to build facilities in countries other than the US, and that “lower duties on Chinese exports would only boost orders from the US rival’s own semiconductor manufacturers.”
“Taiwan and the US semiconductor and other technology industries are highly complementary to each other, especially the US-designed, Taiwan-foundry model, which creates a win-win business model for Taiwan and US industries,” the Taipei Ministry of Economic Affairs commented.
When the CHIPS and Science Act funding for TSMC’s US investment was announced in April last year, President Joe Biden commented: “TSMC’s renewed commitment to the United States, and its investment in Arizona represent a broader story for semiconductor manufacturing that’s made in America and with the strong support of America’s leading technology firms to build the products we rely on every day.”
