National Security Fund's Exit Entirely Due to This? Foreign Media: Taiwan-US Tariffs May Drop to 15%, Replacing TSMC with Increased Investment

The US-Taiwan tariff negotiations are taking shape, with the US lowering tariffs on Taiwan to 15%. In exchange, Taiwan is required to significantly increase TSMC’s investment in Arizona, integrating advanced chip manufacturing capacity into the US supply chain.

The New York Times reports that the US government is close to finalizing tariff negotiations with Taiwan. Not only will tariffs on Taiwanese goods be reduced, but TSMC will also be asked to substantially expand its semiconductor manufacturing investments in the US, further incorporating Taiwan’s advanced chip capacity into the American supply chain. The report indicates that the process is now in the final stages of legal review and could be announced as early as this month.

Once the agreement is completed, the overall tariffs on US exports to Taiwan will be reduced from the current levels to 15%, aligning with the treatment of Japan, South Korea, and other Asian allies. The National Security Fund entered the market last April in response to the tariff war and just concluded the longest stabilization period in history of 279 days yesterday. The timing suggests that intelligence may have already been in hand.

Tariffs in exchange for investment, TSMC to double production in Arizona

As one of the core conditions of this agreement, TSMC commits to building at least five new wafer fabs in Arizona, nearly doubling its current footprint there. Details on the specific investment schedule and capital expenditure have not yet been disclosed, but this move will make the US the most important manufacturing base for TSMC outside Taiwan.

Currently, TSMC has completed one wafer fab in Arizona since 2020, with a second under construction, scheduled to start operation in 2028, and plans for four more fabs in the future. If five more are added, it will represent a structural leap in its US manufacturing footprint.

US strategic shift: using trade policy to bring semiconductor manufacturing back home

Since April last year, when the US launched high tariffs on multiple trade partners, the Trump administration has begun negotiating with allies to exchange “investment in the US” for lower import tariffs. Japan and South Korea have committed to investing hundreds of billions of dollars into strategic industries such as shipbuilding, nuclear energy, electronics, and critical minerals.

Taiwan is a key node in the semiconductor sector. Nearly all advanced chips are monopolized by Taiwan, and these chips are core components for AI, cloud data centers, automobiles, and military systems. However, as Beijing’s sovereignty claims over Taiwan intensify and live-fire military exercises frequently occur around the Taiwan Strait, US companies and government officials are increasingly anxious about supply chain disruptions.

US officials privately state that if Taiwan were to encounter conflict, the production of electronics, automobiles, and weapons systems worldwide could face catastrophic disruptions. This is the fundamental reason why Washington strongly urges TSMC to relocate key capacities to the US.

• This article is reprinted with permission from: 《Chain News》
• Original title: 《Is the National Security Fund’s Exit Due to This? NYT: Taiwan-US Tariffs to be Announced This Month, Dropping to 15% in Exchange for TSMC’s Increased Investment》
• Original author: Neo