While US President Donald Trump’s plan to slap tariffs on Taiwan-produced chips might bring back manufacturing jobs, the cost of doing so could fall on US firms and consumers, experts said.
Trump on Jan. 27 said he intended to impose tariffs on Taiwan to bring chip manufacturing back to the US, arguing that about 98 percent of the chip business has gone to Taiwan and “we want them to come back.”
Asked what steps can Taiwan take to dissuade Trump from imposing additional tariffs on Taiwanese semiconductors, Bonnie Glaser, managing director of the Indo-Pacific Program at the German Marshall Fund, said via e-mail on Sunday that Taiwan can take measures to zero out the trade surplus it has with the US, and Taiwan Semiconductor Manufacturing Co (TSMC) could pledge to build more fabs and increase chip production in the US
Photo: Sam Yeh, AFP
“That’s what Trump wants,” she said.
California Republican Party chairwoman Jessica Millan Patterson agreed, saying on Saturday that tariffs are a strategy Trump would use to safeguard the US’ position.
NEGOTIATING TACTIC
Trump would use every possible means to ensure the US remains in the strongest and most advantageous position, and tariffs are one of his negotiating tactics, she said.
Speaking of Trump possibly slapping 100 percent tariffs on Taiwan-produced chips, Randy Chang (張家豪), vice president of business development at NEO Semiconductor, said that without Taiwan’s semiconductor foundries, the US would not hold a significant share in chip design.
Chang, previously a business manager at TSMC North America, said that semiconductor foundry has never been the US’ strongest area.
“Without Taiwan’s foundry industry, the US IC design sector, as well as marketing and design of end products, might not have flourished as they do today,” he said.
“If Taiwanese manufacturing companies are impacted by tariffs, the biggest victim could be the United States itself,” he said.
Regarding Trump’s goal of increasing jobs in the US, Silicon Valley-based semiconductor expert Joe Chou (周信結), who had worked for HP Inc and Honeywell International, said that chip manufacturing involves a cultural aspect and is not as straightforward as it might seem.
NOT COMPETITIVE
“The US does not have a competitive edge in this area,” Chou said, adding that Taiwan has never competed with the US in the fabless semiconductor market.
“That sector is not only America’s strength, but also the most profitable segment of the semiconductor industry,” he added.
Chang and Chou said that if the US government imposes tariffs on Taiwanese semiconductor products, US customers, such as Nvidia and Apple, would bear the brunt of the increased costs.
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