Taiwan has pushed back on a U.S. request to move chip production stateside to cover half of America’s demand, underscoring the tensions complicating trade talks between the two sides.
Vice Premier Cheng Li-chiun said Wednesday that the idea of having the U.S. produce 50% of the semiconductors it needs came from Washington, and Taiwan has never made such a commitment.
“This issue was not discussed in this round of negotiation, and we will not agree to such a condition,” Cheng said.
Cheng said Taiwan wants to focus on concessions linked to the Section 232 investigation, which has recently been expanded to cover more products.
U.S. Commerce Secretary Howard Lutnick said in a NewsNation interview published this week that the U.S. has held discussions with Taipei about the proposal as a way to reduce the risks of overreliance on overseas chipmaking.
U.S. officials have for years warned about an overdependence on Taiwan Semiconductor Manufacturing Co. and its giant ecosystem of suppliers, which together make and supply the vast majority of the world’s most advanced chips. That risk emerged particularly during COVID-era shortages that highlighted how semiconductors fueled industries from car-making to military technology and artificial intelligence.
Taiwan’s Cabinet said on Wednesday that “certain progress was made” after recent in-depth talks with Lutnick, U.S. Trade Representative Jamieson Greer and their teams, according to a statement.
It added that more than 70% of Taiwan’s exports to the U.S. are semiconductor-related and subject to the investigation. Negotiations can only wrap up after both sides reach consensus on so-called reciprocal tariffs, Section 232 measures and supply chain cooperation, it said.
In July, the U.S. imposed a 20% reciprocal tariff on imports from Taiwan, a higher rate than what regional competitors such as Japan and South Korea face. Semiconductor-related goods were exempted, as they remain under the Section 232 review.
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