Trump says Taiwan should pay for its own defense, TSMC shares weaken

Taiwan should pay for the United States’ defence because it gives it nothing, US Republican presidential candidate Donald Trump said. Reuters reports. Shares of Taiwanese chipmaker Taiwan Semiconductor Manufacturing (TSMC) weakened. Taiwan’s diplomacy said it would not comment on the statements made by candidates in the US presidential campaign.

Taiwan should pay for defending

“I know these people very well, I respect them very much. After all, they took about 100 percent of our chip business. I think Taiwan should pay for defending us,” former U.S. President Trump said in an interview with Bloomberg Businessweek magazine published Tuesday. The interview itself was conducted on June 25. “You know, we’re no different than an insurance company. Taiwan doesn’t give us anything,” Trump said.

TSMC is the largest contract chipmaker in the world. Those chips are used in a wide range of devices, from artificial intelligence applications to smartphones and fighter jets. Analysts say any war over Taiwan would decimate the global economy.

Complaint about Chinese military activities

The United States is Taiwan’s most important international supporter and arms supplier, but it has no formal defence agreement with the democratically governed island, which is claimed by China. However, the US is legally obliged to provide Taiwan with the means to defend itself. Taiwan has complained repeatedly over the past four years about Chinese military activities to pressure Beijing.

U.S. President Joe Biden angered the Chinese government with comments that seemed to imply that the U.S. would defend Taiwan if it were attacked, a departure from the long-held U.S. position of “strategic ambiguity.” Washington maintains official diplomatic relations only with Beijing, while it severed official relations with Taipei in 1979. It continues to manage its relations under the Taiwan Relations Act, which, among other things, authorises the supply of defence arms to the island and the continuation of economic, cultural and political relations.

Source: ČTK

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