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A top Taiwanese trade negotiator has signaled that the government plans to keep much of its semiconductor production on the island, after U.S. Commerce Secretary Howard Lutnick floated the idea of a
50-50 split of chip manufacturing with Washington.
Upon arriving in Taiwan in the early hours of Oct. 1, Vice Premier Cheng Li-chiun told reporters that the latest round of trade negotiations with American officials centered on tariffs and did not touch on Lutnick’s proposal about splitting chip production with the United States.
“I want to clarify to Taiwanese people that this is the idea of the U.S. side. Our negotiating team has never made any commitment to a 50-50 split on chips,” Cheng
told reporters at Taiwan’s Taoyuan International Airport.
“Rest assured, we didn’t discuss this matter this time, and we will not agree to such conditions.”
The Epoch Times has reached out to the U.S. Trade Representative’s Office and the Commerce Department for comment.
Taiwan
produces almost all of the world’s most sophisticated semiconductors, an indispensable component of tech products from mobile phones to military jets.
The strategic importance of the chip industry has risen as Taiwan faces mounting pressures from China, whose ruling Communist Party views the self-governing democracy as its own territory to be taken by force if necessary. Analysts
see Taiwan’s semiconductor capabilities as crucial for its self-defense and for securing international support in the event of an invasion by its giant neighbor.
With tensions rising across the Taiwan Strait, U.S. officials have voiced concerns about America’s reliance on Taiwan for chip manufacturing. Treasury Secretary Scott Bessent
told CNBC on Aug. 19 that having “99 percent of the advanced chips in the world produced in Taiwan” constitutes a “single point of failure for the global economy.”
In a NewsNation interview released on Sept. 27, Lutnick said that his pitch to Taiwan was to have the United States produce half of the chips.
“My objective, and this administration’s objective, is to get chip manufacturing significantly onshored, “ he
said. “We need to make our own chips.”
Pointing to Taiwan’s geographical closeness to China and its distance from the United States, Lutnick said, “The Chinese have said, ‘We’re going to take Taiwan.’ Like, they’re not even shy about it. So this is an issue.”
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A big screen broadcasts news about China's military drills around Taiwan, outside a shopping mall in Beijing on April 1, 2025. Adek Berry/AFP via Getty Images
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The Trump administration has been pushing companies to shift manufacturing to the United States across various sectors, including
chip production. In April, the Commerce Department
announced a Section 232 investigation into imports of semiconductors and pharmaceutical products, citing national security risks tied to reliance on foreign manufacturing. The findings of this investigation could lead to additional tariffs on related imports.
According to Taiwan’s Executive Yuan, its cabinet, over 70 percent of shipments to the United States were information and communication technology (ICT) products, which include semiconductors.
In the latest round of trade negotiations, Taiwanese negotiators sought a more favorable tariff rate from the United States, as well as preferential treatment for Taiwanese products subject to the U.S. Section 232 investigation, Executive Yuan said in a
statement on Oct. 1.
Taiwanese officials have achieved “some progress” on this target after an in-depth discussion with the U.S. team led by Lutnick and Trade Representative Jamieson Greer, according to a statement.
Taiwan is currently subject to a
20 percent U.S. tariff as negotiations continue.
Separately, Taiwanese President Lai Ching-te hosted a U.S.
delegation led by Luke J. Lindberg, under secretary for trade at the U.S. Agriculture Department, on Sept. 30.
In his remarks, Lai mentioned that Taiwan plans to purchase $10 billion of U.S. agricultural products, including soybeans, wheat, corn, and beef, in the next four years, according to his
office.
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