Taiwan’s President Vows to Address US Concerns on Chip Industry and Boost Defence Spending
Taiwan’s President Lai Ching-te pledged on Friday to hold talks with the United States about addressing President Donald Trump’s concerns over the semiconductor industry. Lai also committed to increasing investment in the US and boosting Taiwan’s defence budget to strengthen national security.
Addressing US Semiconductor Concerns
Trump criticised Taiwan on Thursday, saying he aimed to bring semiconductor manufacturing back to the US, blaming the island for “taking away” the industry. In response, Lai stressed the importance of the global semiconductor supply chain, calling it an “ecosystem” that relies on cooperation among multiple countries.
“We understand President Trump’s concerns,” Lai told reporters after a National Security Council meeting. “We will work closely with our semiconductor industry to develop strategies and engage in further discussions with the United States.”
Taiwan is home to the world’s largest contract chipmaker, TSMC, a key supplier for companies such as Apple and Nvidia. The island plays a crucial role in the global semiconductor market and the rapidly growing artificial intelligence (AI) sector.
Strengthening Economic Ties with the US
Lai highlighted the deep economic relationship between Taiwan and the US. Taiwan’s exports to the US hit a record $111.4 billion last year, driven by strong demand for high-tech products like semiconductors. Taiwan also enjoys a large trade surplus with the US, which surged by 83% in 2024.
“Taiwan is the United States’ most reliable trade partner,” Lai said, adding that the US is Taiwan’s largest foreign investment destination. His comments signalled a willingness to continue deepening bilateral economic ties while addressing trade imbalances.
Increased Defence Spending to Boost Security
In addition to economic commitments, Lai announced plans to increase defence spending. This move responds to Trump’s long-standing criticism that Taiwan, like other US allies, should invest more in its defence. Lai acknowledged Taiwan’s growing military threat from China, which claims the island as its territory.
“Taiwan must demonstrate our determination to defend ourselves,” Lai said. He revealed plans to propose a special budget that will raise defence spending from 2.5% to 3% of Taiwan’s GDP. This increased budget will help bolster the island’s ability to respond to rising tensions in the region.
Lai’s remarks underscore Taiwan’s dual strategy of addressing US concerns while strengthening its own security in the face of external challenges.
with inputs from Reuters
