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Taiwan Weighs High-Tech Strategic Partnership with the U.S. Amid Tariff Talks

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Taiwan is considering the creation of a high-tech strategic partnership with the United States, as Washington seeks greater Taiwanese investment and industrial cooperation, Taiwan’s top tariff negotiator said on Thursday.

Taiwan — home to the world’s leading contract chip manufacturer, TSMC — currently faces a 20% U.S. tariff on its exports and is looking to negotiate a reduction. The initiative comes as both economies explore deeper technological collaboration amid growing global competition over semiconductor supply chains.

Vice Premier Cheng Li-chiun, who heads Taipei’s delegation in the ongoing tariff talks, said she remains optimistic about reaching a consensus with the U.S. on what she called a “Taiwan model” for investment.

“The current negotiation focus is that the United States expects us to expand investments and engage in supply chain cooperation,” Cheng told reporters in Taipei after returning from Washington.

She emphasized that Taiwan’s approach would not involve relocating its core supply chains, but rather expanding production capacity on U.S. soil in strategic sectors. The plan would include export credit guarantees, joint R&D projects, and the co-development of industrial clusters between the two countries.

TSMC’S ROLE AND THE U.S. EXPECTATIONS

While the U.S. has expressed interest in more domestic semiconductor production, Cheng clarified that TSMC was not directly involved in the latest negotiation round. The company, currently investing $165 billion in chip plants in Arizona, continues to keep most of its production operations in Taiwan.

She also dismissed recent reports that U.S. Commerce Secretary Howard Lutnick had proposed a 50-50 chip production split, saying:

“That idea was not raised in our talks, and it is not something Taiwan would agree to.”

Cheng noted that Washington’s priority appears to be strengthening its domestic chip production to reduce supply chain dependence on Asia, while Taiwan’s long-term strategy is to stay rooted at home but expand globally through bilateral cooperation.

INDUSTRIAL PARTNERSHIP, NOT RELOCATION

The envisioned “Taiwan model,” Cheng said, represents a strategic partnership framework—one where the island’s companies would invest in R&D and manufacturing capacity abroad, supported by governmental financial and policy mechanisms, without shifting their operational core from Taiwan.

Neither the U.S. Commerce Department nor the Office of the U.S. Trade Representative has commented publicly on the discussions, which continued as the U.S. government entered a temporary shutdown this week.

With Taiwan’s semiconductor industry playing a pivotal role in the global AI and electronics boom, both Taipei and Washington are looking to balance national security priorities with economic growth.

“Our aim,” Cheng concluded, “is to remain rooted in Taiwan, deploy around the world, and build bilateral strategic cooperation that supports both sides’ technological ambitions.”

US-South Korea Trade Talks Focus on Big Tech Regulation, Agriculture, and Strategic Cooperation

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The United States and South Korea continue negotiations aimed at resolving trade issues, including tariffs, digital services regulation, agriculture, and strategic investments. South Korea is seeking to extend a 90-day pause on 25% U.S. tariffs set to expire on July 9 as talks progress.

Key Issues in the Negotiations:

1. Digital Services and Big Tech Regulation

  • South Korea is advancing legislative proposals to regulate major tech companies like Google, Apple, Facebook, and local firms Naver and Kakao, aiming to curb market dominance and protect smaller businesses.

  • U.S. lawmakers have expressed concern that South Korea’s laws mirror the EU’s Digital Markets Act and unfairly target American tech firms while exempting Chinese giants such as ByteDance and Alibaba.

  • The ruling Democratic Party in South Korea is reportedly slowing down antitrust legislation to balance trade sensitivities.

2. Content Providers and Data Restrictions

  • South Korea requires content providers like Netflix to pay network usage fees.

  • Restrictions on exporting location-based data by Google and other providers are a sticking point, linked to national security concerns related to North Korea.

  • South Korea plans to rule on Google’s renewed request to use detailed mapping data outside the country by August 11.

3. Agriculture Access and Market Sensitivities

  • The U.S. seeks greater access to South Korea’s agriculture sector, particularly beef, apples, and potatoes.

  • South Korea restricts imports of beef from animals older than 30 months over mad cow disease concerns.

  • Although tariffs on beef will drop to zero by 2026 under a 2007 pact, farmers remain concerned about further market liberalization.

  • South Korea’s heavy tariff on rice imports (over 500%) has not been raised recently in talks.

4. Defense Costs and Foreign Exchange Policies

  • Discussions on foreign exchange policy and cost-sharing for approximately 28,500 U.S. troops stationed in South Korea are ongoing but handled separately from trade talks.

5. Industrial Cooperation and Investments

  • Both sides emphasize industrial cooperation, particularly in shipbuilding, as a way to revitalize U.S. manufacturing and reduce trade deficits.

  • South Korea is noted as a leader in AI, semiconductors, chips, batteries, and automotive industries.

6. Alaska LNG Project

  • South Korea is cautiously considering energy purchases linked to the $44 billion Alaska LNG project, awaiting more technical details from the U.S. later this year.