Taiwan says it will resist pressure from Washington to move half of chip production to US | CNN Business

Taiwan has vowed to resist pressure from Washington to shift half of its chip production capacity to the United States, throwing down the gauntlet to the Trump administration.

Taiwan “will not agree” to producing 50% of its semiconductors – vital to everything from electronics and iPhones to training artificial intelligence and weapon systems – on US soil, Taiwan’s Vice Premier Cheng Li-chiun said Wednesday.

“Our negotiating team has never made any commitment to splitting chips 50-50, so the public can rest assured,” she told media after returning from the US after the latest round of tariff negotiations.

US Secretary of Commerce Howard Lutnick sparked alarm among Taiwanese over the weekend by demanding in a TV interview that Taiwan split its chip production evenly between domestic and US facilities – adding fresh tensions to the ongoing US-Taiwan trade talks. Beyond Taipei’s pushback, opposition party officials and experts have also voiced criticism.

Lutnick also said that Washington has been in conversations about the proposal with Taipei, and that the Trump Administration’s objective is to increase the market share of made-in-US chips “to 40% and maybe 50%.”

But Cheng said on Wednesday that the idea did not make it into the latest round of bilateral discussions. It was not clear if TSMC was involved in the negotiations between the US and Taiwan.

On Wednesday, Taiwan’s cabinet said in a statement that the fifth round of trade negotiations just concluded in Washington and led by Cheng has achieved “certain” progress, as officials work toward a goal of reducing US tariffs on Taiwanese goods from the current level of 20%.

Domestically in Taiwan, Washington’s growing list of demands are straining relations with the East Asian economic powerhouse, and risk further souring public sentiment in Taiwan toward the US.