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11 Mar, 2025
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Taiwan Shows US Allies How To Win Over Trump
@Source: newsweek.com
Taiwan showed this month that it was possible to emerge from negotiations with Donald Trump with a win-win deal, after the high-profile breakdown of Trump's recent meeting with Ukraine's Volodymyr Zelensky demonstrated the perils of defying the U.S. president.Last week, Trump announced an additional $100 billion investment in the U.S. semiconductor industry by Taiwan's TSMC, the leading chipmaker whose output holds the key to sustaining America's status as an economic, technological and military superpower.Trump has criticized Taiwan in the past for what he called the theft of America's chipmaking industry, and said Taiwan still holds a "monopoly" over the fabrication of semiconductors, the brainpower behind emerging technologies such as artificial intelligence and quantum computing."Without the semiconductors, there is no economy," Trump said while introducing C.C. Wei, TSMC's chairman and CEO, at the White House. "This is a tremendous move by the most powerful company in the world.""It's a matter of economic security. It's also a matter of national security for us," he said. "At the same time, Mr. Wei will be able to diversify and have his tremendous presence in another place and a very safe place."Liang-chih Evans Chen, a researcher at the Institute for National Defense and Security Research think tank in Taipei, said: "Taiwan is much more active than Ukraine in increasing its relations and linkages to the U.S., so increasing arm sales from the U.S. and expanding bilateral trade, especially investment in the U.S., are two keys. And those fit Trump's preferences."A Win for TrumpIn Taiwan, where the threat of a Chinese takeover is rarely absent from public debate, the news was met with uncertainty about the island's own staying power as a high-tech economy, and renewed doubts about whether the United States remains a committed security guarantor amid shifting priorities in Washington.TSMC's moves at home and abroad have long had the backing and tacit encouragement of the pro-American government in Taipei, so it was no surprise when, less than 48 hours later, Taiwan President Lai Ching-te stood alongside Wei to address concerns about the United States, Trump and TSMC, whose stock prices wobbled slightly in the aftermath.Lai said his government was not pressured by the Unites States, while Wei said the expanded commitment abroad "will not affect investment in Taiwan."Bargaining ChipsThe Taiwanese government has sometimes caught flak for going out of its way to secure resources for TSMC's processes—water and electricity—and is now helping the company find new plots of land to expand its foundry empire, often seen by some as a "silicon shield."Last month, Zhu Fenglian, a spokesperson for Beijing's Taiwan Affairs Office, accused Taipei of using the island's leading enterprises as "bargaining chips" to secure U.S. support."Compared to Ukraine, Taiwan's advantage is that the ruling party and the government, most of the business sector, and society in general are pro-American. Its most challenging disadvantage is China's sharp power and political warfare, which manipulates and polarizes the island's domestic politics, economy, society, and public opinion," Chen told Newsweek.Taiwan also is not the only government to win favor in Washington. Saudi Arabia's $1.3 trillion U.S. spending plan, announced last week, has earned the promise of a state visit by Trump. The trip will help Saudi Crown Prince Mohamed bin Salman raise the Gulf kingdom's profile as it prepares to host the men's soccer World Cup in 2034All In on AmericaSelf-ruled Taiwan, only 100 miles from China, the world's premier rising superpower, threw its lot in with the United States long ago. Unlike Kyiv, Taipei has never truly had the luxury of hedging between Washington and Beijing with the help of medium powers in its neighborhood.At a time when America Inc. is cutting costs and pressuring long-time allies the world over to share more of the global security burden, Taiwan has chosen to speak Trump's language by demonstrating a readiness to quickly and effectively assuage his concerns about the economy, a through line of both his presidencies.The alternative—one scathing social media post akin to the public falling-out experienced by Zelensky—would have been disastrous for Taipei and for Lai, some of whose hard-line supporters blamed the Ukrainian president for disrespecting Trump on camera.America's Stake in TaiwanInstead, Taipei chose to encourage a process that, through TSMC, further increased the U.S.'s stake in Taiwan and its ability to continue making the cutting-edge chips found in the flagship products of America's biggest tech companies.Ming-chi Kuo, an industry analyst at TF International Securities, said in his newsletter that the lack of details in the announcement gives TSMC the flexibility to tailor its U.S. spending based on future conditions, making it a win for both sides."TSMC stands out as the most successful non-U.S. company in negotiations with the Trump administration," Kuo said.The revised U.S.-Ukraine minerals deal, which wasn't signed due to the White House spat, may have offered symbolic wins for both Trump and Zelensky. Washington is giving Kyiv a do-over in talks in Saudi Arabia on Tuesday."In political science, we say politics can 'spill over' into the economy and vice versa," said Chen. "Economic interdependence should enhance their common interest and create a promise of security to each other. It might not be always true, but it still makes sense."Taiwan has been one of the U.S.'s top 10 trade partners for a decade. Prewar Ukraine was not among the top 60, according to the Office of the U.S. Trade Representative. Last year, U.S. goods trade with Taiwan totalled $158.6 billion, compared to $2.9 billion with Ukraine, USTR reported.
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