Trump Tells Taiwan to Expect a Higher Price Tag for U.S. Defense

"Trump also accused Taiwan of sinking the U.S. semiconductor sector, signaling he wants a more transactional approach to shielding the island from China.

Donald J. Trump, the Republican presidential nominee, said that Taiwan should pay the United States for defending it from China, a remark highlighting the uncertainties — and high stakes — of how he might handle the smoldering Taiwan Strait dispute if he should win a second term.

Taiwan depends on political and military support from the United States to help resist pressure from Beijing, which claims the island as Chinese territory. Mr. Trump warned that Taiwan is perilously exposed to any attack from China and far away from U.S. protection, and signaled that he would take a more bluntly conditional approach to Taiwan.

“I think Taiwan should pay us for defense,” Mr. Trump said in an interview with Bloomberg Businessweek that published on Tuesday. “You know, we’re no different than an insurance company.”

Just as Mr. Trump’s denigration of NATO has rattled America’s allies, his comments on Taiwan raised the question of how invested a second Trump presidency would be in the island’s defense. The United States is committed by law to help Taiwan defend itself, and leaves open the possibility of sending forces if Beijing ever attacks the island.

Mr. Trump also took aim at Taiwan’s dominance in making advanced semiconductors, saying: “They did take about 100 percent of our chip business.”

The share price of Taiwan Semiconductor Manufacturing Company — the world’s biggest maker of advanced computer chips — fell by 2.4 percent on the island’s stock exchange on Wednesday, apparently in reaction to his comments.

Although Mr. Trump has made similar comments about Taiwan in recent years, his latest may land in Taiwan with a bigger impact, given his strong position in the race against President Biden.

“If I was in Taiwan, I would take this statement seriously because it is not an isolated remark — there is now a pattern,” said David Sacks, a fellow for Asia studies at the Council on Foreign Relations “This statement, in particular, epitomizes Trumpism because it reflects his purely transactional view of foreign policy.”

Taiwan already pays for nearly all of its weapons orders from U.S. manufacturers, though the Biden administration has moved to directly transfer some military equipment to Taiwan, drawing on U.S. stockpiles. Mr. Trump’s broader point seemed to be that Taiwan owed the United States more for its overall security.

Still, Mr. Trump’s comments should not be read as the final word on U.S. policies toward Beijing and Taiwan if he wins in November, Taiwanese experts said. A chorus of voices in Washington, including the Republican nominee for vice president, J.D. Vance, may influence his position, they said.

“During his presidency, he did not openly talk about abandonment of Taiwan,” said Alexander C. Huang, an international security expert who advises Taiwan’s opposition Nationalist Party, referring to Mr. Trump’s term, which ended in January 2021. “We also already understand that President Trump, if he returns to the White House, would ask Taiwan to bear more responsibility for our defense.”

Taiwan’s government has been increasing spending on its military, and in 2022 it began extending conscription from 4 months to 12 months. But many Taiwanese experts and officials say that their island will need to spend more to deter China’s much larger army.

The Trump and Biden administrations both expanded support for Taiwan while U.S. relations with President Xi Jinping in Beijing soured drastically over the past eight years. On Wednesday, China’s foreign ministry again denounced U.S. arms sales to Taiwan and said it would, in retaliation, suspend highly tentative nuclear arms control discussions with Washington.

Mr. Trump’s running mate, Mr. Vance, and other Republicans have argued that China remains the most pressing global challenge to the United States, and some say that protecting Taiwan should be a higher priority for Washington than backing Ukraine against Russia.

“I think that we should make it as hard as possible for China to take Taiwan in the first place,” Mr. Vance told The New York Times in an interview published last month. “We’re not doing that because we’re sending all the damn weapons to Ukraine and not Taiwan.”

Taiwanese officials have also vigorously courted bipartisan support in Congress. Taiwan’s supporters in the Republican Party could persuade Mr. Trump to be less skeptical of the island if he wins, said Raymond Chen-En Sung, the vice president of the Prospect Foundation, an institute affiliated with the Taiwanese government.

“The strategic competition between the U.S. and China is something for the whole national security circle around Mr. Trump,” he said. If Mr. Trump won a new term, Mr. Sung added, “I believe they will have the task of educating the president about the importance of Taiwan.”

Even so, Mr. Trump’s comments are likely to spur Taiwan to try to assure the United States — and Mr. Trump — that it is committed to completing semiconductor plants in Arizona and to spending more on its own military.

“We’re willing to shoulder more responsibility. This is us defending ourselves,” Taiwan’s premier, Cho Jung-tai, said in response to Mr. Trump’s remarks. “We’re very grateful” for U.S. support, he added.

Officials in Washington have long been concerned about the world’s reliance on Taiwan for advanced semiconductors, the tiny computer chips that power electronic devices from iPhones to fighter jets.

Over the past four years, TSMC has committed to building new factories in Japan, Germany and Arizona. In April, the Biden administration awarded Taiwan Semiconductor Manufacturing Company, or TSMC, a $6.6 billion grant to try to bring cutting-edge chip making to the United States.

Mr. Trump suggested that was a raw deal.

“Now we’re giving them billions of dollars to build new chips in our country, and then they’re going to take that, too,” Mr. Trump said in the interview. He said that China’s leader, Mr. Xi, also coveted Taiwan’s semiconductor facilities. “That’s the apple of President Xi’s eye,” Mr. Trump said.

The notion that Taiwan had “taken” the United States semiconductor business was a misunderstanding, said Eric Huang, vice president at Digitimes, a tech industry market research firm based in Taiwan. Most of the world’s top semiconductor companies by market value are American firms like Nvidia and Qualcomm, Mr. Huang said.

“Taiwan plays a supporting role primarily by providing manufacturing services for these U.S. chip companies,” he said." [1]

Right. Taiwan is manufacturing chips for American companies. This is exactly the same as D. Trump is saying. Americans are just reselling those chips for high prices. This is how you get the high market value.

1. Trump Tells Taiwan to Expect a Higher Price Tag for U.S. Defense. Buckley, Chris.  New York Times (Online) New York Times Company. Jul 17, 2024.