USA: Trump Proposes Prohibitive Duties on Imports from China
Taiwan says it will support its companies that decide to move their production from China to other countries. Analysts: The decision could mean the end of Taiwan's independence
US President-elect Donald Trump has proposed imposing 60% duties on imports from China. But Trump’s proposal affects not only the world’s second largest economy, but also allies including Taiwan, whose exports to the US could be subject to an additional 20 percent duties.
Trump’s proposal to impose prohibitive duties on Chinese and Taiwanese imports could have a “very negative impact on Taiwanese entrepreneurs in China,” said Taiwanese Economy Minister Kuo Jyh-huei, according to whom “the Taiwanese government will support its companies in China to relocate their production elsewhere and will assist in moving their production bases out of China as soon as possible.”
The United States offers significant benefits to foreign companies that move their production to American soil, creating huge problems for the economies of many countries around the world and especially those in Western Europe. After escalating tensions with China, Taiwanese microelectronics makers are moving their factories to India, Vietnam, but above all to the USA, home to the first so-called “12-inch wafer” plant of Taiwan Semiconductor Manufacturing Company (TSMC), which is expected to start producing four-nanometer chips in Arizona in less than a month.
According to Taiwan’s United Daily News, TSMC founder Morris Chang and executives from the company’s most important customers, including Nvidia (Jensen Huang) and AMD (Lisa Su), are expected to attend the plant’s opening ceremony, scheduled for Decenber 6. After three years of experimenting with the production of four-nanometer microchips, Arizona is set to begin producing revolutionary three-nanometer microchips in 2028.
However, many Taiwanese and international analysts have said they have serious concerns about the process of moving innovation and technology manufacturing off the island. According to political scientist Wu Rwei-fung, “the time may come when, without its advanced manufacturing, Taiwan will no longer be of interest to anyone, after which the island will be ‘gifted’ to China.”
Microelectronics giant TSMC recently found itself on a collision course with Beijing after telling several Chinese customers that it would “suspend production of artificial intelligence (AI) and high-performance computing chips for them.” According to Japan’s Nikkei newspaper, TSMC has decided to “step up efforts to enforce export controls imposed by the USA.”
“The Chinese customers affected by the Taiwanese company’s decision are those working on high-performance computing applications, graphics processing units (GPUs), and applications related to artificial intelligence computing using 7-nanometer chip manufacturing technology or higher, but not those producing chips for mobile devices, communications, and connectivity using this technology,” sources at TSMC clarified.