Under US President Donald Trump’s push to “make America great again” and pursue an “America first” strategy, Taiwan and the US reached a trade agreement that includes a 15 percent tariff without stacking on existing most-favored nation rates. Also included was favorable treatment for semiconductors and related products under Section 232, and mutual investment and cooperation — based on a “Taiwan model” — to jointly develop high-tech industrial parks in the US.
Taiwan has the opportunity to build a closer bilateral relationship with the US through mutually beneficial trade exchanges and high-tech industrial cooperation. This would not only contribute to Taiwan’s economic growth, but also strengthen Taiwan-US strategic ties, thus enhancing Taiwan’s capacity to safeguard itself while resisting China.
As Trump began his second term, he promoted policies aimed at making the US great again. On the domestic front, Trump strengthened US manufacturing, created jobs and boosted economic growth. The semiconductor industry has played a particularly critical role in this, as leading US technology firms — such as Apple Inc, Nvidia Corp, Alphabet Inc, Advanced Micro Devices Inc and Qualcomm Inc — all rely on Taiwan Semiconductor Manufacturing Co (TSMC) for chip supply. In regards to foreign policy, Trump adhered to his “America first” principle, pursuing a realist diplomatic strategy, strengthening US political and economic interests through comprehensive cooperation with democratic countries in energy, high tech, trade, geostrategy and military affairs.
Following its rise in recent years, China has continuously expanded its military capabilities in the South China Sea, the East China Sea and the Taiwan Strait, thereby undermining peace and stability in the Indo-Pacific region and hindering US interests. Taiwan is a critical hub in the US’ strategy to counter China, and as Beijing pursues military expansion and seeks to compete with the US for hegemony — thereby intensifying US-China confrontation — Washington has strengthened arms sales to Taiwan, and increased bilateral military training and cooperation.
It has also sought to revitalize its domestic economy and reinforce its high-tech manufacturing and defense industries to leave a rapidly advancing China behind. Thus, the US has reached agreements favorable to Taiwan’s exports by decreasing tariffs to 15 percent with no stacking.
Furthermore, while supporting land, labor, water and electricity supply as well as providing tariff exemptions, the US hopes that TSMC would build five more factories on US soil. This move would not only help the US establish a complete semiconductor supply chain, develop high-tech parks, promote reindustrialization and achieve the goal of making the country “great again,” but would also strengthen the defense industry, provide more advanced weapons to Taiwan, enhance Taiwan’s ability to resist China and consolidate US interests in the western Pacific.
The US is TSMC’s largest market globally. As its existing capacity is already fully utilized, TSMC has increased investment and expanded its fabrication facilities in the US to meet market demand — all while adhering to the principle of not allowing advanced process technologies to be transferred overseas. Taiwan hosts a dense cluster of wafer fabs, and it is estimated that the capacity produced from US expansion would account for only about one-10th of TSMC’s overall global capacity. This would not affect TSMC’s expansion in Taiwan, which includes the addition of 12 fabs and the manufacturing of advanced chips.
This Taiwan-US trade agreement tightly links security relations with economic and trade interests. By deeply embedding Taiwan’s semiconductor industry into the US domestic supply chain, Taiwan’s survival and the US’ technological leadership in areas such as artificial intelligence and military chips have become a shared destiny. This mutually beneficial relationship strengthens Taiwan’s overall economic resilience and provides it with more substantial trade leverage to secure US support amid military threats from China. This represents a successful case of transforming the Taiwan experience into global strategic value. Taiwan is forging a distinctive path of partnership that differs from that of other countries through substantive mutual benefits pursued in Trump’s realist diplomacy.
Michael Lin is a retired diplomat formerly posted in the US.
Translated by Kyra Gustavsen
The conflict in the Middle East has been disrupting financial markets, raising concerns about rising inflationary pressures and global economic growth. One market that some investors are particularly worried about has not been heavily covered in the news: the private credit market. Even before the joint US-Israeli attacks on Iran on Feb. 28, global capital markets had faced growing structural pressure — the deteriorating funding conditions in the private credit market. The private credit market is where companies borrow funds directly from nonbank financial institutions such as asset management companies, insurance companies and private lending platforms. Its popularity has risen since
The Donald Trump administration’s approach to China broadly, and to cross-Strait relations in particular, remains a conundrum. The 2025 US National Security Strategy prioritized the defense of Taiwan in a way that surprised some observers of the Trump administration: “Deterring a conflict over Taiwan, ideally by preserving military overmatch, is a priority.” Two months later, Taiwan went entirely unmentioned in the US National Defense Strategy, as did military overmatch vis-a-vis China, giving renewed cause for concern. How to interpret these varying statements remains an open question. In both documents, the Indo-Pacific is listed as a second priority behind homeland defense and
Every analyst watching Iran’s succession crisis is asking who would replace supreme leader Ayatollah Ali Khamenei. Yet, the real question is whether China has learned enough from the Persian Gulf to survive a war over Taiwan. Beijing purchases roughly 90 percent of Iran’s exported crude — some 1.61 million barrels per day last year — and holds a US$400 billion, 25-year cooperation agreement binding it to Tehran’s stability. However, this is not simply the story of a patron protecting an investment. China has spent years engineering a sanctions-evasion architecture that was never really about Iran — it was about Taiwan. The
In an op-ed published in Foreign Affairs on Tuesday, Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) said that Taiwan should not have to choose between aligning with Beijing or Washington, and advocated for cooperation with Beijing under the so-called “1992 consensus” as a form of “strategic ambiguity.” However, Cheng has either misunderstood the geopolitical reality and chosen appeasement, or is trying to fool an international audience with her doublespeak; nonetheless, it risks sending the wrong message to Taiwan’s democratic allies and partners. Cheng stressed that “Taiwan does not have to choose,” as while Beijing and Washington compete, Taiwan is strongest when
RSS