- Trump told Bloomberg Businessweek that Taiwan has taken over the US chip manufacturing business.
- Trump wants Taiwan, which China claims as its territory, to pay the US for protection.
- Taiwan is the world’s chip capital. The country produces about 90% of all the world’s advanced microchips.
US relations with Taiwan would likely be at a critical juncture if former President Donald Trump wins a second term.
Trump, the Republican presidential nominee, told Bloomberg Businessweek that Taiwan’s dominance in the chip industry has made the island rich. He offered no evidence in the interview to support his claims about Taiwan.
“Taiwan took over our chip business,” he told Businessweek in an interview before Saturday’s failed assassination attempt. “I mean, how stupid are we? They took all our chip business. They’re so rich.”
Taiwan is a semiconductor chip hub. The country produces 92% of the world’s most advanced microchips, according to the US-based Semiconductor Industry Association.
In 2021, Taiwan’s chip industry generated $137 billion in output and accounted for nearly 25% of global chip sales, the U.S. International Trade Commission said in a November report.
Taiwanese chipmakers benefit U.S. companies. TSMC is the world’s largest contract chipmaker: It supplies chips to American end users like Apple, which uses them in its consumer products. AI chipmaker Nvidia is also a big TSMC customer.
But Beijing claims self-ruled Taiwan as its own territory and has stepped up military activity around the island in recent years, raising fears of a Chinese invasion that could have major ramifications for the global economy and chip supplies.
US boosts domestic chip production to diversify some of its chip supplies away from Taiwan with $52 billion CHIPS Act for America which was signed into law by President Joe Biden in August 2022.
The US is still legally obligated to protect Taiwan by providing the island with the military means to defend itself.
“I think Taiwan should pay us for defense,” Trump told Bloomberg. “You know, we’re no different than an insurance company. Taiwan doesn’t give us anything.”
Shares of Taiwan-listed chipmaker Taiwan Semiconductor Manufacturing Company fell as much as 3% on Thursday following Trump’s complaints.
Responding to Trump’s remarks, Taiwanese Premier Cho Jung-tai said Thursday that the US and Taiwan maintain good relations and that Taipei has strengthened its defense budget.
“We are willing to take more responsibility to defend ourselves and ensure our security,” Cho said at a scheduled press conference.
China may not have decided whether it prefers Trump or Biden
This isn’t the first time Trump has complained about Taiwan’s dominance in the chip business. In July, he also complained to Fox News about the same issue.
“Remember this, Taiwan has taken over our business. We should stop them, we should tax them and put tariffs on them,” he said at the time.
China has previously highlighted a potential US shift away from Biden’s stance that the US would defend Taiwan if attacked.
“The United States has always pursued ‘America First,’ and Taiwan can change from a ‘chess piece’ to a ‘discarded pawn’ at any time,” said Chen Binhua, a spokesman for China’s Taiwan Affairs Office in January.
But China seems to have yet to decide whether it prefers a Biden or Trump presidency, wrote Yun Sun, a nonresident fellow at the Brookings Institution, on May 31.
After all, Trump’s first term saw his administration repeal a number of US government regulations that limited interactions between American and Taiwanese officials — a move that deepened their ties.
“China does not believe Trump wants war with China over Taiwan, but they see Trump’s concessions to his team on Taiwan as the result of an overall ‘maximum pressure’ campaign to force China to give in in other areas, such as trade,” Sun wrote.
