Taiwan rejects U.S. proposal of '50-50' chip production, says trade talks focused on tariffs

Core Viewpoint - Taiwan rejects the U.S. proposal to locally manufacture half of the chips it supplies to the U.S., emphasizing that the "50-50" split in semiconductor production was not discussed during trade talks [1][3]. Group 1: Trade Negotiations - The focus of the recent trade talks was on lowering tariff rates, securing exemptions from additional duties, and reducing levies on Taiwanese exports, with Taiwan currently facing a reciprocal tariff rate of 20% [2]. - Taiwan's top trade negotiator, Cheng Li-chiun, indicated that the proposal for a "50-50" split in semiconductor production was not even on the agenda during discussions [1]. Group 2: U.S. Position and Concerns - U.S. Commerce Secretary Howard Lutnick stated that the goal is to significantly onshore chip manufacturing, proposing a shift to a "50-50" production model to reduce American reliance on Taiwan, which currently meets 95% of U.S. chip demand [3][4]. - Lutnick's proposal has faced criticism from Taiwanese politicians, who view it as an act of exploitation, with Eric Chu, chairman of the Kuomintang party, condemning it as undermining Taiwan's semiconductor industry [5][6]. Group 3: Strategic Implications - The concept of Taiwan's "Silicon Shield," which refers to its critical role in global chip production as a defense against potential military action from China, is a significant aspect of the discussion [6]. - Lutnick downplayed the "Silicon Shield," suggesting that a more balanced chip production between the U.S. and Taiwan would enhance Taiwan's safety [7].