Taiwan Aids Firms in U.S. Shift Amid Trump Tariffs

Taiwan's economy ministry is stepping in to help companies relocate to the United States following President Trump's proposed tariffs on Taiwanese semiconductors. The move aims to support Taiwanese firms in the face of potential disruptions to their business operations and supply chains. The ministry's assistance will focus on providing information, promoting research and development cooperation, and maintaining close communication with companies to ensure they can adapt to changing market conditions.

Taiwan's semiconductor industry is a critical driver of its economy, accounting for around 15% of its GDP (Source: [Taiwan's semiconductor industry contributes 15% of GDP](https://www.FocusTaiwan.tw/news/202103160014)). Trump's tariffs could disrupt this industry, leading to job losses and economic slowdown. Taiwan's trade surplus with the United States surged 83% in 2023 compared to 2022, driven by high-tech products like semiconductors (Source: [Taiwan's trade surplus with the U.S. surged 83% in 2023](https://www.reuters.com/article/us-usa-trade-taiwan-idUSKBN2ZT0JM)). Tariffs could reverse this trend, negatively impacting Taiwan's economy.

Taiwan's government has already expressed concern, with Economy Minister Kuo Jyh-huei stating that Taiwan would support firms intending to relocate to the United States, including helping them find partners on the ground (Source: [Taiwan to support firms relocating to U.S. due to Trump's tariffs](https://www.reuters.com/article/us-usa-trade-taiwan-idUSKBN2ZT0JM)). The ministry's measures are designed to support Taiwanese companies in navigating the complex U.S. market and regulatory environment, making it easier for them to establish operations in the country.

However, the primary challenge is that building a semiconductor fab takes three to four years, and even if TSMC were to start constructing a sub-2nm-capable fab in the U.S. today, it would come online only in 2028–2029. This means that any tariffs imposed on Taiwanese-made chips in the coming weeks would immediately make PCs, servers, and smartphones more expensive for companies and individuals in the U.S., which could have a negative impact on the U.S. economy. To mitigate this, the U.S. administration would need to introduce exemptions, as it has done in the past with China-made graphics cards and motherboards.

Moreover, building fabs in the U.S. is likely to become more expensive if Denmark imposes export taxes on ASML machines, which are crucial for semiconductor manufacturing. This could make the import tariffs on TSMC chips less unpalatable for companies, as the cost of producing chips in the U.S. might not be significantly higher than in Taiwan.

In conclusion, Taiwan's economy ministry is taking steps to support companies in relocating to the United States, but the effectiveness of these measures in the face of Trump's tariffs remains uncertain. The primary challenge is the time it takes to build semiconductor fabs and the potential increase in production costs in the U.S. due to export taxes on ASML machines.