- Trump told Bloomberg Businessweek that Taiwan had taken away semiconductor manufacturing businesses from the United States.
- President Trump wants the United States to pay protection fees to Taiwan, which China claims as its territory.
- Taiwan is a global semiconductor powerhouse, producing about 90% of the world’s advanced microchips.
If former President Donald Trump is re-elected, relations between the United States and Taiwan are likely to become a sore point.
Republican presidential candidate Trump told Bloomberg Businessweek that Taiwan’s dominance in the semiconductor industry makes it rich, though he didn’t offer any evidence to back up his claims about Taiwan in the interview.
“Taiwan took our semiconductor business,” he told Business Week in an interview before Saturday’s assassination attempt. “How stupid of us. They took all our semiconductor business. They have a ton of wealth.”
Taiwan is a semiconductor chip powerhouse: According to the Semiconductor Industry Association, Taiwan produces 92% of the world’s most advanced microchips.
According to a report released in November by the U.S. International Trade Commission, Taiwan’s semiconductor industry generated output of $137 billion in 2021, accounting for about 25% of global semiconductor sales.
Taiwanese chipmakers are a boon to U.S. companies: TSMC is the world’s largest contract chipmaker and supplies chips to U.S. end users such as Apple, which uses them in consumer products. AI chipmaker Nvidia is also a major customer of TSMC.
But Beijing claims Taiwan as its own territory and has stepped up military activity around the island in recent years, raising fears that China could invade the island and have a major impact on the global economy and semiconductor supplies.
The United States is boosting domestic semiconductor manufacturing to diversify some of its semiconductor supplies from Taiwan with a $52 billion investment. CHIPS for America Act It was signed into law in August 2022 by President Joe Biden.
The United States remains obligated by law to protect Taiwan by providing it with the military means to defend itself.
“I think Taiwan should pay for our defense,” Trump told Bloomberg. “We’re no different than an insurance company. Taiwan doesn’t give us anything.”
Shares in Taiwan-listed semiconductor giant Taiwan Semiconductor Manufacturing Co. (TSMC) fell as much as 3% on Thursday following Trump’s complaints.
Responding to Trump’s remarks, Taiwan Premier Zhao Chung-tai said on Thursday that the United States and Taiwan maintained good relations and that Taiwan was strengthening its defense budget.
“We are ready to take on more responsibilities to defend our country and ensure its security,” Zhao said at a scheduled news conference.
China appears to have yet to decide whether it prefers Trump or Biden
This is not the first time that President Trump has complained about Taiwan’s dominance in the semiconductor industry, having complained about the same issue to Fox News in July of last year.
“Remember, Taiwan took our business. We should have stopped them, we should have taxed them, we should have imposed tariffs,” he said at the time.
Prior to this, China had emphasized the possibility that the United States could reverse Biden’s stance that it would defend Taiwan if it were attacked.
“The United States has always pursued ‘America First’ and Taiwan may turn from a ‘chess piece’ to a ‘sacrificial pawn’ at any time,” Chen Bin-hua, spokesman for China’s Taiwan Affairs Office, said in January.
But China likely hasn’t yet decided whether it prefers Biden or Trump, Yun Sun, an adjunct fellow at the Brookings Institution, wrote on May 31.
After all, the Trump administration’s first term saw the lifting of U.S. government rules restricting interactions between U.S. and Taiwanese officials, deepening ties between the two countries.
“While China does not believe that President Trump wants a war with China over Taiwan, it sees his coddling of his team on the Taiwan issue as the result of an overall ‘maximum pressure’ campaign to get China to cave in on other areas, such as trade,” Sun wrote.
