On April 2, the day after the United States announced new tariffs, The New York Times published a report interviewing Ming-Yen Ho, a nonresident fellow at DSET, regarding external concerns about the Taiwan-related aspects, semiconductor connections, and subsequent impacts.
Although the recent US government tariff announcements do not involve the semiconductor industry, The New York Times noted that the decision not to impose tariffs on the chip industry does not mean that future actions will not be taken against Taiwan or other regions (including South Korea, another major chip source country). The chip trade between Taiwan and the US is deeply influenced by geopolitical factors, and since Trump took office, this relationship has shown a “markedly transactional shift.”
“It’s just a fact of the global chip supply chain right now,” stated Ming-Yen Ho, a nonresident fellow at DSET. Even chips produced at TSMC’s Arizona plant must leave the United States for packaging before reaching American consumers. “Any chip that’s made in Arizona right now will have to leave the U.S. for some time before going back.” This also means that if the US government imposes tariffs on semiconductors in the future, the increased costs may be absorbed by American consumers.
This phenomenon occurs because the semiconductor manufacturing supply chain is both globalized and highly specialized, with any production line containing semiconductors spanning multiple locations, making it difficult to clearly identify the country of origin. “Very few semiconductors are actually directly imported into the United States; most are incorporated into a final product,” said Jimmy Goodrich, a senior adviser for technology analysis at the RAND Corporation. Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics, also added: “It’s much more tricky than saying, ‘We are going to slap a tariff on steel.'”
On April 6, Taiwan’s President Lai Ching-te announced that Taiwan has formed a negotiation team led by Deputy Premier Cheng Li-chun, with members including the National Security Council, the Office of Trade Negotiations, relevant ministries of the Executive Yuan, as well as academic and industry representatives. In addition to increasing procurement and investment in the US, the discussion also focused on building a foundation for fair trade between Taiwan and the US, addressing issues such as non-tariff trade barriers.