Imposing tariffs on chips from Taiwan would not alter the reality that the US is dependent on Taiwan-manufactured chips, former US national security adviser John Bolton said yesterday.
Washington-based think tank the Information Technology and Innovation Foundation said the market share of US-made chips fell by 70 percent between 1990 and 2020.
Bolton said that because Taiwan is vulnerable due to China, diversification is reasonable, but it needs to be done with a concrete understanding of what “the real issue is, which is the ability to have cutting-edge capabilities that you can’t develop overnight.”
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US President Donald Trump’s reasoning that tariffs would incentivize US producers and investors to invest domestically shows a lack of understanding of the current global situation, he added.
“The international system is very complex, and it’s true that the whole world is really dependent on the chips that are manufactured in Taiwan,” Bolton said.
The quality of the chips made by Taiwan Semiconductor Manufacturing Co is very high, so the level of investment involved is also “extraordinarily high,” he added.
Bolton attributed the situation to a lack of attention in the US for years, saying that Trump’s claim that Taiwan “stole” the semiconductor manufacturing business is “absolutely not true.”
Imposing high tariffs on Taiwanese chips would be a trade-distorting practice, he said.
“I think it’s very important for all customers in the United States to understand that their cost of doing business ... are going to go up and that that would either make their products more expensive, which would reduce their sales, or would eat into their profits,” Bolton said.
As the US is dependent on the chips for information technology, “there’s a big constituency in the United States that doesn’t want to see its cost go up across the board,” he said, adding that they could lobby members of the US Congress and others to persuade the White House not to put tariffs in place.
Bolton also expressed concerns about Trump’s attitude over the conflict between Russia and Ukraine, which he labeled “cavalier.”
Beijing is studying the Trump administration’s stance and determining what it would do in case of a provocation against Taiwan, he said.
Bolton also called on Taiwan to be more proactive in making the US public understand Taiwan’s role and importance to the US economy.
Taiwan has always had a very effective de facto embassy in Washington and the capacity to have many friends in the US Congress, he said, adding that it is time to redouble those efforts.
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