Taiwan should pay the United States for its defense because it gives the country nothing, former US President Donald Trump said in an interview . His statement caused shares in Taiwanese chipmaker TSMC to fall .
“I know the people very well, I respect them very much. They took about 100% of our chip business. I think Taiwan should pay us for defense,” Trump said. “You know, we’re no different than an insurance company. Taiwan doesn’t give us anything,” he added.
The United States is supplier arms Taiwan's largest supporter and , but there is no formal agreement. However, the US is legally obligated to provide Taiwan with the means to defend itself. Informal defense cooperation between the US and Taiwan has existed for many years, with the US providing advanced weapons and military training to Taiwan. The US also conducts military exercises in the region to demonstrate its support and deter potential attacks from China.
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This relationship has become more complex in recent years due to China. The US continues to support Taiwan, but it also tries to maintain a balance in its relations with China. Donald Trump's statements about Taiwan's need to fund its own defense reflect this complexity and the changing geopolitical circumstances.
Taiwan's government places great emphasis on defense and modernization , developing its own submarines and other equipment, and has often said publicly that its security is in its own hands.
Taiwan's Prime Minister, Cho Jung-tai, responded to Trump's comments, saying that Taiwan and the US have good relations despite the lack of formal agreements and that it is committed to strengthening defense .
“Taiwan has steadily strengthened its defense budget and shown its responsibility to the international community,” he told reporters in Taipei. “We are willing to take on more responsibilities; we defend ourselves and ensure security our.”
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In recent years, Taiwan, which China claims as its own territory, has complained about repeated Chinese military activity. US President Joe Bidenhas made comments that appear to suggest the US would defend Taiwan if attacked, which is surprising given the US has always maintained a stance of “strategic ambiguity”.
Taiwan is awaiting about $19 billion worth of weapons from the United States. American officials and politicians have repeatedly pledged to speed up the process.
Since 2022, Taiwan has complained of delays in US arms deliveries as manufacturers focused on supplying Ukraine to help it counter Russian military forces.
TSMC stock price drops
Taiwan's TSMC is the dominant maker of advanced chips used almost everywhere: artificial intelligence applications, smartphones, fighter jets and more. Analysts believe that any conflict over Taiwan would decimate the global economy.
Shares of Taiwan Semiconductor Manufacturing Co Ltd (TSMC) closed down 2.4% on Wednesday. The broader market closed down 1%.
“We see Trump’s comments as political rhetoric,” said Allen Huang, vice president of Mega International Investment Service. “TSMC is an excellent company and has won the market over many rivals in the United States.”
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TSMC is spending billions to build new factories overseas, including $65 billion on three plants in the US state of Arizona. However, most of its production remains in Taiwan.
Source: www.reuters.com
