TAIPEI – Taiwan has firmly turned down a US proposal that would relocate half of all semiconductor output, especially chips used by the US, to American soil. Vice Premier Cheng Li-chiun, the island’s senior tariff negotiator, made the final remark on Wednesday after coming back from trade talks in Washington.
US Secretary of Commerce Howard Lutnick talked about the US idea for a “50-50 split” in chip manufacture during an appearance with the television network NewsNation over the weekend. Taiwan is home to TSMC, the world’s largest contract chipmaker, and it makes most of the world’s most advanced semiconductors.
Taiwan’s Clear Position
Vice Premier Cheng, who is in charge of the tariff talks with Washington, told reporters at the airport that the controversial 50-50 notion was not brought up during the recent meetings.
Cheng told Taiwan’s official Central News Agency, “I want to make it clear that this is the US’s idea.” “Our team has never promised to split the chips 50-50.” Don’t worry, we didn’t talk about this subject in this round of talks, and we wouldn’t agree to those terms.
The refusal shows how determined Taiwan is to protect its semiconductor industry, which is frequently called the “Silicon Shield” and is seen as a key part of its national security and economic power.
Focus on Tariffs When Trade Is Good
Taiwan has a big trade surplus with the US right now, and its exports to the US have a temporary 20% tariff.
Cheng said that the talks with the Office of the United States Trade Representative and the US Department of Commerce had instead been about tariffs and getting a “more favorable tariff rate” for Taiwanese goods. He said that “detailed” talks had taken place and that “certain progress” had been made.
There is still some diplomatic tension over the 50-50 proposal, but important collaboration in manufacturing is moving forward. TSMC is spending a huge $165 billion to create new semiconductor plants in Arizona, but the company says that most of its sophisticated production capability will stay in Taiwan.
On Tuesday, Taiwan’s Premier Cho Jung-tai talked about the talks in parliament. He said that Cheng had held several meetings and that the “most important substantive consultations are currently underway.”