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The takeaway: The tariff-focused foreign policy of the US administration is keeping governments and industries on edge. President Trump is now turning his attention to semiconductor manufacturing, with a particular focus on Taiwan-based production - though any major shifts in that sector remain unlikely for the time being.
Washington authorities reportedly asked Taiwan to relocate 50 percent of the country's chip production to the US, but Taipei rejected the proposal. According to Bloomberg, Taiwan's Vice Premier Cheng Li-chiun confirmed that the relocation idea originated in the US. The country never agreed to it and has no intention of discussing it further.
"This issue was not discussed in this round of negotiation, and we will not agree to such a condition," Li-chiun stated.
Meanwhile, US Secretary of Commerce Howard Lutnick stated that the proposal was indeed raised during recent meetings with Taiwanese officials. The US is actively seeking to reduce its reliance on foreign semiconductor production. The conflicting statements suggest a significant disagreement between the two sides.
For years, US policymakers have debated reducing dependence on overseas chip manufacturing. Recent tariffs and policy pressure under the Trump administration are accelerating these efforts, though the final outcome could carry unintended consequences.
According to Taiwan's government, discussions with the US regarding the Section 232 investigation are ongoing, and "certain progress" has been made. The Trade Expansion Act remains the primary tool behind President Trump's tariffs, which treat alleged export imbalances with other countries as a matter of national security.
Lutnick's team working on the Taiwan dossier noted that more than 70 percent of the country's exports to the US are semiconductor-based products. Negotiators are expected to reach a common understanding on Trump's reciprocal tariffs, including issues related to supply chain cooperation.
TSMC is a key player in the global semiconductor supply chain and Taiwan's primary leverage in geopolitical tensions with China. Taipei is unlikely to relinquish any portion of its chip production, even as the Hsinchu-based foundry becomes entangled in the US-initiated trade disputes.
The company has already agreed to significantly expand its manufacturing presence in the US, but progress in Arizona has faced challenges. Recent rumors suggested a potential joint venture with Intel, though TSMC ultimately dismissed these speculations.