Taiwan and TSMC push back against Donald Trump's proposed chip tariffs

TSMC has committed $65 billion to building chip plants in Arizona, encouraged by US subsidies under the CHIPS Act.

Taiwan and its leading semiconductor manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC), are seeking to counter US President Donald Trump’s proposed tariffs on foreign-made semiconductors, which could disrupt global chip supply chains.

According to The Financial Times, the tariffs are part of Trump's broader plan to shift semiconductor production to the US, but they have sparked concerns among Taiwanese officials and tech leaders.

Taiwan engages in diplomatic talks over tariffs

Taiwan’s Deputy Economy Minister Cynthia Kiang has travelled to Washington for discussions with US officials, aiming to prevent tariffs from harming Taiwanese chip exports. Meanwhile, TSMC’s board is meeting at its Arizona chip facility to assess how the proposed duties might impact its operations and future investment plans.

Industry analysts warn that targeting TSMC with tariffs misunderstands the complexity of the semiconductor supply chain, which relies on global cooperation and specialized manufacturing hubs.

TSMC’s Arizona investment and strategic dilemma

TSMC has committed $65 billion to building chip plants in Arizona, encouraged by US subsidies under the CHIPS Act. However, Trump’s tariff proposal, coupled with potential cuts to these subsidies, could disrupt TSMC’s expansion strategy.

The company must now balance maintaining Taiwan’s central role in semiconductor production while meeting US demands for domestic chip manufacturing. Moving too much production to the US could weaken Taiwan’s strategic importance and increase operational costs.

US companies caught in the crossfire

Tech giants such as Apple and Nvidia, which rely on TSMC’s advanced chips, could face higher costs if tariffs are imposed. Industry experts suggest that US chip customers may need to lobby Washington to reconsider the proposed tariffs.

"Apple, Nvidia, and other chip designers would bear the brunt [of chip tariffs]," said Dan Nystedt, vice president at TriOrient, an Asia-based investment firm.

What’s next for US-Taiwan semiconductor relations?

The outcome of these discussions will shape the future of the global semiconductor supply chain, influencing investment decisions and US-Taiwan trade relations. TSMC is expected to continue pushing for subsidy protections while the US weighs the political and economic consequences of new trade barriers.

With semiconductor technology at the centre of US-China tensions, Taiwan’s role in the global chip industry has never been more critical.