The path to revitalizing American manufacturing and prosperity involves leveraging the strengths of economies that complement the United States.
Taiwan’s robust technological manufacturing know-how is well known, with Taiwanese firms helping to produce the products designed and sold by American technology brands. Eliminating the double taxation currently stymieing growth between the US and Taiwan is key to fully leveraging Taiwan as a partner.
Taiwan has consistently proven itself a vital American trading partner. In 2024, US exports to Taiwan totaled US$42.3 billion (NT$1.37 trillion), a 6% increase from the previous year. This strong trade relationship spans multiple sectors, highlighting the complementary nature of the two economies.
Beyond trade figures, Taiwan's role in the global technology supply chain closely aligns with US interests and priorities. As a leading semiconductor producer, Taiwan supplies components that power a wide array of American products, from consumer electronics to advanced defense systems. Closer collaboration with Taiwanese firms offers the US a strategic advantage in securing supply chains and advancing technological development.
Strengthening US manufacturing
The synergy between Taiwanese innovation and American industrial capacity presents a unique opportunity to strengthen domestic manufacturing and create jobs. Taiwanese companies have shown a strong commitment to investing in the US, bringing capital, expertise, and high-quality employment opportunities.
One notable example is the Taiwan Semiconductor Manufacturing Company (TSMC) announcement of a US$100 billion investment to build three new chip fabs, two advanced packaging plants, and an R&D center around Phoenix. This monumental initiative is expected to create thousands of high-paying, high-tech positions in advanced chip manufacturing and research. The ripple effects extend beyond direct employment, stimulating local economies and drawing in related industries.
Recent developments highlight the growing potential for collaboration. Intel and TSMC have reportedly reached a tentative agreement to form a joint venture, with TSMC holding a 20% stake. The venture would operate Intel's chipmaking facilities and leverage TSMC's operational expertise to boost Intel's foundry capabilities—aligning with US efforts to bolster domestic semiconductor production.
These partnerships show how international cooperation can contribute to revitalizing American manufacturing. By combining Taiwanese technical expertise with US industrial infrastructure, we can create a more resilient and competitive manufacturing sector.
However, recent policy shifts could threaten this progress. On April 2, 2025, President Donald Trump announced sweeping tariffs, including a 32% duty on Taiwanese imports. While aimed at addressing trade imbalances, the move has raised concerns about potential disruptions to existing and future investments.
Although semiconductor products are currently exempt, the broader economic impact may complicate operations within global supply chains, raising material and upstream costs for Taiwanese firms investing in the US.
Congress must recognize that such tariffs may inadvertently deter the very investments crucial to rebuilding American manufacturing. A stable and predictable trade environment is essential to attract long-term partners like Taiwan.
Eliminating double taxation
Despite the strength of US-Taiwan economic ties, eliminating double taxation remains a crucial next step to unlocking deeper investment and cooperation.
The House of Representatives recently passed the United States-Taiwan Expedited Double-Tax Relief Act (H.R. 33) by a vote of 423–1. This bill seeks to address double taxation on cross-border investments between the two countries, facilitating smoother business operations and signaling US commitment to creating a conducive environment for foreign direct investment.
Eliminating double taxation would encourage more Taiwanese companies to establish and expand operations in the US, helping to invigorate the manufacturing sector and drive economic growth.
It is also about fairness. Taiwanese firms bring world-class processes, high-paying jobs, and decades of experience navigating complex global markets. Yet if they are taxed more heavily than their Korean, Japanese, or German counterparts, it sends the wrong message—one that fails to reflect today’s geopolitical realities.
Moreover, if the Senate moves to eliminate double taxation, it sends a clear signal—to Taiwanese companies, global markets, and Beijing—that the US is serious about integrating Taiwan into its economic future.
By fostering a welcoming investment climate through smart policy, the US can position itself as a leading destination for high-tech manufacturing. This strategy not only addresses immediate economic goals but also strengthens long-term industrial resilience.
Beyond chips, Taiwan is positioning itself to be a long-term contributor to US prosperity, whether in investing in energy or partnering with American universities on biomedical innovation.
Passing legislation to eliminate double taxation is about removing structural disincentives to high-quality investment. It’s about aligning tax policy with national security and industrial priorities shared by both countries. And it’s about building—with clarity—the economic architecture of the free world.
Chieh-Ting Yeh is a venture investor in Silicon Valley, editor-in-chief of Ketagalan Media, and a director of US Taiwan Watch, an international think tank focusing on Taiwan–US relations.
