Taiwan will not agree to Washington's proposal to produce half of the semiconductors needed for the American market in the United States, Taiwan's Deputy Prime Minister and chief trade negotiator Cheng Li-chiun said after returning from talks in the United States, Focus Taiwan reports.
The initiative to split production belongs to US Commerce Secretary Howard Lutnick. In a recent interview with NewsNation, he said that he offered Taiwan a 50-50 chip production deal.
"The conversation we've had with Taiwan [is] that it's vital for you to have us [the U.S.] produce 50 percent. The idea that I pitched them [Taiwan] was let's get to 50-50. We're producing half, you're producing half," Lutnick said.
According to Cheng Li-chiun, the "50/50" issue was not even discussed during the meeting with American representatives. The vice premier emphasized that the main focus of the negotiations was on tariffs: Taiwan seeks to reduce rates, eliminate additional duties and reduce export fees. Currently, a 20% tariff is in effect for Taiwanese goods.
According to Lutnick, about 95% of the US's chip needs are currently covered by production in Taiwan. He emphasized that the administration's goal is to move a significant portion of production to American territory to reduce dependence on imports.
According to CNBC, US President Donald Trump has previously also criticized Taiwan's dominance in the semiconductor industry, accusing the island of "stealing" American business.
Lutnick's proposal has sparked a sharp reaction among Taiwanese politicians. Eric Chu, the head of the opposition Kuomintang party, called it "exploitation and robbery," stressing that no one has the right to undermine the positions of Taiwan Semiconductor Manufacturing Company (TSMC).
"No one can sell out Taiwan or TSMC, and no one can undermine Taiwan's silicon shield," said Eric Chu.
Taiwan People's Party leader Huang Kuo-chang said that implementing the plan would mean "hollow out the foundations of Taiwan's technology sector."
The US insists that more balanced production will make Taiwan safer, while the island believes that it is its dominance in chip production that provides its strategic protection from China.