U.S. President Donald Trump has stirred fresh debate on U.S.-Taiwan trade relations and semiconductor manufacturing policy. According to Reuters, Trump made assertive remarks at a Republican National Congressional Committee event, where he criticized government grants to foreign chipmakers and disclosed his firm approach during his presidency.
Trump warns TSMC over domestic investment
During the event, Trump revealed he had warned Taiwan Semiconductor Manufacturing Company (TSMC) of a potential tax of up to 100 percent if it did not establish its factories within the U.S.
Unlike the current administration, which has awarded TSMC’s U.S. unit a $6.6 billion grant for its Arizona-based manufacturing expansion, Trump said he offered no financial assistance but used taxation as a deterrent. TSMC had previously confirmed a $100 billion investment plan in the U.S., which includes five new facilities.
In response to the tariff threat, Taiwanese officials said they have already initiated discussions with Washington to resolve the matter diplomatically. Taiwan’s National Security Bureau Director-General confirmed ongoing “strategic communication” with U.S. officials, aiming to secure a negotiation process that avoids retaliation.
Taiwan has offered zero tariffs, more investment, and procurement in the U.S. to de-escalate the situation. Meanwhile, a report by Investing claimed that Taiwan’s stock market has been volatile amid the developments, prompting the government to activate a $15 billion stabilization fund to restore investor confidence. TSMC shares remained flat, but major suppliers like Foxconn experienced noticeable declines.
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