Taiwan rejects U.S. proposal of '50-50' chip production, says trade talks focused on tariffs

Taiwan has firmly rejected a U.S. proposal that suggested local production of half the chips currently supplied to the American market. Cheng Li-chiun, Taiwan's top trade negotiator and vice premier, stated that the so-called '50-50' semiconductor production split was not even on the agenda during her recent discussions in the U.S. Instead, the focus of the trade talks centered on reducing tariff rates and securing exemptions from additional duties that Taiwan currently faces, which stands at a reciprocal tariff rate of 20%. Commerce Secretary Howard Lutnick highlighted the necessity for the U.S. to lessen its reliance on Taiwanese chip manufacturing, which currently fulfills 95% of U.S. demand. He emphasized the administration's goal of increasing domestic chip production, suggesting a partnership where both the U.S. and Taiwan would share manufacturing responsibilities. This proposal has sparked criticism in Taiwan, with opposition party leader Eric Chu labeling it as an exploitative move. He firmly stated that no one could undermine Taiwan's semiconductor industry or its esteemed Taiwan Semiconductor Manufacturing Company (TSMC), which holds a leading position in the global market. Taiwan's significant role in chip production is often cited as a strategic advantage, providing a form of defense against potential military aggression from China, a concept known as the 'Silicon Shield.' However, Lutnick expressed skepticism about this theory, advocating instead for a more balanced approach to chip production between the two nations. The geopolitical tension remains high, as Beijing continues to assert claims over Taiwan, which it considers a breakaway province. The island's leaders, in turn, have consistently pushed back against these assertions.