Taiwan’s Economy Ministry responds to Trump’s threat of up to 100% tariffs on chips, including those from TSMC

Taiwan’s government has been swift to respond to the talk of huge tariffs by the recently inaugurated 47^th president of the United States. In a statement shared by the Reuters news agency today, the island’s economy ministry responded with a calm and conciliatory tone, which highlighted that Taiwan and the U.S. currently enjoy highly complementary trade, and that working closely made for a sound “win-win business model.”

To recap the situation as it stands, on Monday Trump announced plans to impose significant tariffs on Taiwan-made chips. During a House Republicans conference, the President reasoned with the audience, stating that computer chip production companies “left us and went to Taiwan,” and that he wants them back.

Trump’s proposed methodology will not come as a surprise to anyone who watched his pre-election campaigning – tariffs. Specifically, Trump reckons tariffs ranging from “25%, 50% or even a 100% tax” will incentivize semiconductor producers to return in strength and numbers to U.S. shores.

Trump insists that this tariffs plan is the right tool for this job. The new U.S. President also took the opportunity to criticize American tech giants like Apple, AMD, Nvidia, and Qualcomm for sending all their chip production business to TSMC in Taiwan. Additionally, he slated his predecessor’s “ridiculous program” (the CHIPS Act) for wastefully awarding semiconductor giants billions of dollars to set up and expand in the U.S.

“A win-win business model for Taiwan and U.S. industries”

Circling back to the measured response from the Taiwanese government’s economy ministry, it is clear the tactic here is to take the heat out of the discussion of trade and tariffs.

“Taiwan and the U.S. semiconductor and other technology industries are highly complementary to each other, especially the U.S.-designed, Taiwan-foundry model, which creates a win-win business model for Taiwan and U.S. industries,” said a ministry press release. The statement went on to stress that close contact and cooperation would be mutually beneficial.

The Reuters report also reminds us that TSMC actually announced its plans for an Arizona semiconductor plant during the last Trump presidency. Thus, the $12 billion factory plans were signed and sealed around two years before the CHIPS Act statute was enacted. TSMC Fab 21, in Arizona, is rumored to be very nearly ready with the first batch of mass-produced chips for Apple iDevices.

TSMC has yet to issue its own formal statement. We have heard from President Trump and received a response from Taiwan’s most relevant government department, but it is far from clear how things will unfold. As resolute and long-established allies, one would hope the Taiwan-suggested “win-win” strategy will work. Moreover, Trump’s tariffs should realistically come with a metaphorical carrot at the end to have a reasonable chance of success.