TAIPEI (Taiwan News) — US Commerce Secretary Howard Lutnick said Thursday the US wants to move 40% of Taiwan's entire semiconductor supply chain capacity before the end of US President Donald Trump’s term in office.
In an interview with CNBC, Lutnick explained that under a new trade deal, Washington will lower tariffs on Taiwan's goods in exchange for Taiwanese firms investing NT$7.89 trillion (US$250 billion) in the US. He added Taiwan will provide NT$7.89 trillion in credit guarantees to enable small- and medium-sized companies to "bring that whole supply chain to America."
He said TSMC has already purchased land and will expand in Arizona as part of the trade agreement. “They just bought hundreds of acres adjacent to their property. Now I am going to let them go through it with their board and give them time," Lutnick said.
He said that hundreds of firms will go to the US to construct “giant semiconductor industrial parks.” He described the combined investments by Taiwan’s chip companies and credit offered by Taipei as a "US$500 billion down payment.”
In exchange, overall tariffs on Taiwanese goods will be lowered to 15%, while generic drugs, aircraft parts, and scarce natural resources will face zero duties. He said Taiwanese companies building new US semiconductor capacity can import up to 2.5 times the planned capacity duty-free during construction.
Lutnick said, “The objective is to bring 40% of Taiwan's entire supply chain and production to domestically bring it into America.” The goal is to reach this percentage during Trump's term.
He also pointed out that chip companies headquartered in Taiwan but not building factories in the US could face 100% tariffs. In September, Lutnick said that he had been lobbying for a 50-50 split in semiconductor production between Taiwan and the US.
When asked why Taiwan is willing to make such a significant commitment to the US, Lutnick said, “The answer is because Donald Trump is vital to protecting them. So they want to keep our president happy.”
He said that domestic semiconductor capacity is crucial to national security, and “we can't rely on a country that's 9,000 miles (14,484 km) away from us to deliver us these kinds of fundamental national security products.”
