Washington D.C. – US President Donald Trump reignited a trade dispute with Taiwan on Saturday, accusing the island nation of “stealing” America’s chip business, just days after a Supreme Court ruling curtailed his authority to impose broad tariffs. The renewed criticism comes despite significant Taiwanese investment in US semiconductor manufacturing facilities.
Speaking at a press conference , Trump reiterated long-held grievances, stating, “Taiwan came [into the chip sector and] they stole our chip business.” The remarks followed a 6-3 Supreme Court decision that found he had exceeded his powers under the 1977 International Emergency Economic Powers Act when enacting sweeping tariffs. The ruling invalidated many of the tariffs he had previously imposed.
The timing of Trump’s comments is particularly noteworthy. Earlier this year, Taiwan pledged an investment of US$500 billion in exchange for reduced tariffs, lowering them from 20 percent to 15 percent. This commitment was intended to ease tensions and secure a more stable trade relationship, but appears to have done little to quell Trump’s criticisms.
The US President’s attacks are focused on the rapid growth of Taiwan’s semiconductor industry, particularly Taiwan Semiconductor Manufacturing Company (TSMC), one of the world’s largest chipmakers. Trump specifically highlighted how Taiwanese firms have surpassed former US industry leaders like Intel. He also pointed to the construction of new semiconductor plants in states like Arizona and Texas, arguing that these investments are solely motivated by a desire to avoid paying tariffs.
The situation is further complicated by the broader geopolitical context. The semiconductor industry is increasingly viewed as critical to both economic prosperity and national security. The US has been actively seeking to bolster domestic chip production to reduce reliance on foreign suppliers, particularly those in East Asia. TSMC’s investment in US facilities, announced in with a total commitment of $165 billion, including a previously announced $100 billion investment, was initially hailed as a major win for the Trump administration.
However, Trump’s continued rhetoric suggests a deeper dissatisfaction with the current arrangement. He has consistently accused Taiwan of unfair trade practices and has previously utilized tariffs as a tool to pressure the island nation. The latest outburst raises questions about the future of US-Taiwan trade relations and the stability of the global semiconductor supply chain.
The Supreme Court ruling that triggered Trump’s latest comments has broader implications for his trade policies. By limiting the President’s ability to impose tariffs under the guise of national emergency, the court has significantly constrained his options for unilateral trade action. This decision could reshape the landscape of international trade negotiations and potentially lead to a more rules-based system.
The impact of Trump’s remarks is already being felt in Taiwan. Zhou Yonghong, a politician from Taichung city, stated on television that the US tariff ruling could “make China very happy” while simultaneously harming Taiwan’s efforts to secure a favorable trade agreement with the United States. This suggests a growing concern in Taiwan that the US is shifting its stance and may be less willing to accommodate its interests.
The semiconductor industry is at the heart of a complex geopolitical competition. The US, China, and Taiwan are all vying for dominance in this critical sector. The US is seeking to regain its leadership position, while China is investing heavily in its own domestic chip production capabilities. Taiwan, meanwhile, remains a key player, controlling a significant share of the global semiconductor market.
The current situation underscores the delicate balance of power in the region. Any disruption to the semiconductor supply chain could have far-reaching consequences for the global economy. The US-Taiwan relationship will be crucial in navigating these challenges and ensuring a stable and secure supply of semiconductors.
The renewed attacks from Trump also come as TSMC continues to expand its global footprint, including plans for a facility in Dresden, Germany. This diversification strategy is aimed at mitigating risks associated with geopolitical tensions and ensuring a more resilient supply chain. However, it also raises questions about the long-term commitment of Taiwanese companies to investing in the United States.
The future of US-Taiwan trade relations remains uncertain. While Taiwan has made significant investments in the US, Trump’s continued criticism suggests that deeper issues remain unresolved. The Supreme Court’s ruling on tariffs has further complicated the situation, limiting the President’s ability to exert pressure on Taiwan. The coming months will be critical in determining whether the two countries can find a way to navigate these challenges and forge a more stable and mutually beneficial relationship.
