Trump Threatens Tariffs on US Semiconductors Amidst Taiwan Production Dispute
President Trump has threatened to impose a 'fairly substantial tariff' on semiconductors imported from the USA. This move comes as the USA seeks to boost its domestic chip production, with Taiwan currently producing more than half of the world's semiconductors, including nearly all high-end ones. The USA aims to produce 40% to 50% of the chips needed for its consumption.
US Secretary of Commerce Howard Lutnick proposed a 50-50 split in chip production between the USA and Taiwan. However, Taiwan's Vice Premier Cheng Li-chiun has stated that Taiwan will not agree to this proposal. Taiwan's trade surplus with the USA, largely driven by demand for AI-related technology, has put it in Trump's crosshairs. The USA previously imposed a temporary 20% levy on Taiwanese shipments.
More than 70% of Taiwan's exports to the USA are information and communications technology, including chips. Despite this, there is no official agreement between Taiwan's cabinet and the USA on a 50-50 split in semiconductor production.
The USA's goal to increase its domestic chip production remains a contentious issue. While the USA has proposed a 50-50 split with Taiwan, Taiwan's government has not agreed to this proposal. The USA's tariff threats and previous levies on Taiwanese shipments highlight the ongoing trade tensions between the two nations.
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