Washington: If U.S. President Donald Trump imposes tariffs on chips from Taiwan, it could result in the isolation of the United States' economy and push Taiwan closer to China, as revealed by a U.S. expert in an interview with CNA. The proposed tariff, which could reach up to 100 percent, comes with Trump's emphasis on strengthening domestic semiconductor manufacturing due to the U.S.'s heavy reliance on Taiwan for chip production.
According to Focus Taiwan, Trump's nominee for Secretary of Commerce, Howard Lutnick, has echoed the need for enhanced U.S. domestic semiconductor capabilities. This potential imposition has prompted Taiwan's Deputy Economics Minister, Cynthia Kiang, to visit Washington to engage with Trump's team and attempt to dissuade them from implementing the tariff.
Stephen Ezell, vice president for global innovation policy at the Information Technology and Innovation Foundation (ITIF), shared concerns about the profound impacts such tariffs could have on various U.S. industries. Ezell highlighted that companies like Apple Inc. and Nvidia Corp., which depend on Taiwan Semiconductor Manufacturing Co. (TSMC) for chip supply, would face significant challenges. The tariffs would also affect industries reliant on semiconductors, including the automotive sector, consumer appliances, medical devices, and aerospace, leading to higher product prices and reduced competitiveness of U.S. goods globally.
Ezell noted that the tariffs could inadvertently make China the primary beneficiary, as Chinese chipmakers might gain a competitive edge with potentially lower tariffs. He explained that any country facing lower tariffs than Taiwan would benefit, with significant implications for global trade dynamics.
Ezell suggested that Taiwanese companies and TSMC should emphasize the substantial investments already being made in the U.S., such as TSMC's planned or existing fabs in Arizona and foreign investments from companies like Samsung Electronics and SK Hynix. He urged a focus on the strategic benefits of existing investments rather than introducing tariffs that could compromise them.
Highlighting the potential geopolitical repercussions, Ezell warned that weakening Taiwan's semiconductor industry could jeopardize Taiwan-U.S. relations and drive Taiwan closer to China, affecting regional security and American interests.