If Taiwan’s semiconductor industry were to be destroyed, degraded or placed under Western sanctions as a result of a Chinese military occupation of the island, the consequences for the global economy would be enormous because of the irreplaceable market share Taiwan occupies in producing the most highly advanced chips that are needed for many next-generation technologies such as advanced military electronics, artificial intelligence and quantum computing.
Fully aware of how important the so-called silicon shield is to preserving Taiwan’s continued de facto sovereignty, TSMC has made it clear that while it will offshore production capacity for some semiconductor chips in friendly nations like the United States and Japan, the manufacturing of the most advanced chips remains in Taiwan, according to Lee.
Congressional support
“A trade deal creates a halo effect, so the United States private sector comes in and invests more and when the U.S. comes in, the allies invest more,” said Keith Krach, who as undersecretary of State for economic growth during the Trump administration pushed for deeper trade engagement with Taiwan. “For security and defense purposes, we want as much allied investment into Taiwan as possible. That’s why it’s strategic because it’s a great foreign policy tool. If you’re looking at trade just in a box, which sometimes our government does, then you're not taking full advantage of that leverage.”
Key U.S. lawmakers have voiced support for the Biden administration deepening trade engagement with Taiwan, tying it to U.S. national security interests in avoiding a military conflict between Taiwan and China that experts warn would be an order of magnitude more harmful for global economic stability and growth than Russia’s invasion of Ukraine. That's due to the much greater size of the Chinese and Taiwanese economies, respectively, and the reliance of so many foreign trade sectors on Taiwan’s semiconductor industry.
At a September House Ways and Means Committee hearing on prospects for trade with Taiwan, both committee leaders came out strongly in support.
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October 03, 2022 at 05:35PM
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Path uncertain for US-Taiwan free trade deal despite Hill support - Roll Call
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