Taiwan rejects U.S. proposal of '50-50' chip production, says trade talks focused on tariffs

Taiwan volition not judge Washington's connection to locally manufacture fractional the chips it presently supplies to the U.S., the island's apical commercialized negotiator said.

Speaking to reporters, Cheng Li-chiun, besides the country's vice premier, said connected Wednesday that the connection for a "50-50" divided successful semiconductor accumulation was not adjacent discussed, arsenic she returned from commercialized talks successful the U.S., according to Taiwan's Central News Agency.

Cheng said the talks were focused connected lowering tariff rates, securing exemptions from tariff stacking — further duties — and reducing levies connected Taiwanese exports. Taiwan presently faces a "reciprocal" tariff complaint of 20%.

Washington has held discussions with Taipei astir the "50-50" divided successful semiconductor production, which would chopped American reliance connected Taiwan, Commerce Secretary Howard Lutnick said past play successful an interrogation to NewsNation, adding that presently 95% of the U.S. request was met via chips produced wrong Taiwan.  

"My objective, and this administration's objective, is to get spot manufacturing importantly onshored — we request to marque our ain chips," Lutnick said. "The thought that I pitched [Taiwan] was, let's get to 50-50. We're producing half, and you're producing half." 

U.S. President Donald Trump had besides taken purpose astatine the island's dominance successful chips earlier this year, accusing it of "stealing" the U.S.' spot business.

The Office of the U.S. Trade Representative and Taiwan's Ministry of Economic Affairs did not instantly respond to CNBC's petition for comments.

Lutnick's connection has been condemned by Taiwan's politicians, with Eric Chu, president of the island's main absorption enactment Kuomintang, calling it "an enactment of exploitation and plunder," according to the Central News Agency report.

"No 1 tin merchantability retired Taiwan oregon TSMC, and nary 1 tin undermine Taiwan's silicon shield," Chu said, referring to Taiwan Semiconductor Manufacturing Company, the world's person successful precocious spot manufacturing.

Taiwan's captious presumption successful planetary chips accumulation is believed to person assured the land nation's defence against nonstop subject enactment from China, often referred to arsenic the "Silicon Shield" theory.

In his NewsNation interview, Lutnick downplayed the "Silicon Shield," arguing that Taiwan would beryllium safer with much balanced spot accumulation betwixt Washington and Taipei. Beijing views the democratically governed land of Taiwan arsenic its ain territory and has vowed to reclaim it by unit if necessary, portion Taipei rejects those claims. 

Taiwan People's Party Chairman Huang Kuo-chang reportedly called Lutnick's connection an effort to "hollow retired the foundations of Taiwan's exertion sector."