Like the lightning bolt that recently struck the Taipei 101, Taiwan’s tallest skyscraper, so the Trump storm is hitting the island, shaking its economic and political foundations. Always caught between Beijing’s threats and American support, Taiwan now faces new challenges that test its stability. But what are the real implications of Washington’s recent moves? And how will they affect the island’s future?

The Taiwanese giant Taiwan Semiconductor Manufacturing Company (TSMC) is the beating heart of the global semiconductor industry. A leader in the production of advanced chips, it represents a strategic asset not only for Taiwan, but also for the US, which is increasingly determined to reduce its dependence on foreign production.

The Trump administration imposed heavy pressure on TSMC to push it to invest in the US. The result? A colossal $100 billion investment plan for the construction of new plants in Arizona, with a total commitment approaching $165 billion. The stated goal is clear: to bring semiconductor production back to American soil, ensuring direct control by Washington.

The sword of Damocles of duties and TSMC’s strategy

But Trump’s strategy is not limited to stimulating domestic investment.In fact, the president threatens to impose heavy duties on chip imports, directly affecting the Taiwanese industry.The possibility of a 25% tariff on semiconductors made in Taiwan risks undermining the island’s economy, whose GDP is heavily dependent on hi-tech exports.

In parallel, Trump proposed the elimination of the CHIPS Act, the $52.7 billion plan to stimulate semiconductor production in the US. According to his vision, duties would be sufficient to push companies in the sector to invest in the US, without the need for further subsidies. However, this position finds strong opposition: New York Governor Kathy Hochul pointed out that the CHIPS Act has already generated $100 billion and 50,000 jobs, while Arizona Congressman Greg Stanton called Trump’s proposal a ‘direct attack on the semiconductor industry and workers in the state’.

Faced with these uncertainties, TSMC has decided to diversify its investments outside the US, with new plants in Japan and Germany. The production of the most advanced chips, however, will remain in Taiwan at least in the short term. The Taiwanese Minister of Economy has confirmed that 2nm and 1.6nm chips will not be manufactured in the US in 2025, ensuring that the island maintains its technological leadership.

According to analyst Liu Pei-chen of the Taiwan Institute of Economic Research, TSMC’s expansion into the US will not significantly reduce Taiwan’s strategic weight, although the island’s share of production could drop to 75-80% once the Arizona plants are operational.

Taiwan knows that it cannot afford to lose its dominance in the semiconductor sector. A possible application of the duties wanted by Trump could jeopardise the island’s future, making it more vulnerable in the eyes of China. If Taipei were to lose its ‘silicon shield’, one of the main deterrents against Beijing would disappear, jeopardising the precarious balance between economic independence and national security.

Taiwan between Beijing and Washington’s ‘friendly fire’

While the US is pushing for industrial relocation, China is closely watching developments. Beijing considers Taiwan a rebellious island and has repeatedly stated that reunification is only a matter of time. Any weakening of the Taiwanese economy, particularly in the strategic semiconductor sector, could accelerate Chinese plans, with worrying consequences for the island’s security.

The Taipei government, led by Lai Ching-te, seeks to reassure the population, promising to keep defence investments a priority despite the economic difficulties. At the same time, it aims to consolidate relations with Washington, seeking to mitigate the impact of tariffs through the start-up of plants in Arizona.

Storm Trump could be just the beginning of a long period of turmoil for Taiwan. The semiconductor game has just begun and its outcome could redefine the geopolitical balance between Washington, Taipei and Beijing in the coming years.