The president-elect demands a donation for the protection of Taipei. The microprocessor factories on the island are also in the tycoon’s sights
Volodymyr Zelensky is not alone. There is another leader who, just like the Ukrainian president, has to face a former empire much more powerful than his country, and whose veins and wrists are trembling with Donald Trump’s return. It is William Lai, to whom the tycoon is preparing to present a very high bill that risks being unsustainable for the head of the Taiwanese non-state, who has ended up between two fires: on the one hand the diktats of The Donald, on the other the pressure of the fighters and ships with the red star, whose war games signal that the People’s Liberation Army (PLA) is preparing to “reunify” what the People’s Republic of China (PRC) considers its territory.
Taipei depends on the protection of Washington, a subordination increased with the three consecutive governments of Lai’s Democratic Progressive Party (DPP), which did not recognize the “1992 Consensus” (signed by representatives of the Communist Party and the opposition Nationalist Party in Taiwan) and with whom for this reason the PRC has interrupted dialogue for a decade.
On the contrary, the DPP has found a solid support in Congress in Marco Rubio, the ultra anti-China candidate expected to become secretary of state. The Republican senator (sanctioned twice by Beijing for supporting the Uyghur minority and the revolt in Hong Kong) introduced into Parliament the Taiwan Relations Reinforcement Act and the Taiwan Peace Through Strength Act, two laws that aim to strengthen political relations between Washington and Taipei and to increase orders for US-made armaments for the island, which during Trump I recorded a record of 18 billion dollars in approved supplies.
The US bomb scam
However, for Trump, rather than defending the island, what matters is reducing US trade deficits, including with Taiwan, for which the United States, in the first three quarters of 2024 (having overtaken the PRC) became the market for number one export. Therefore The Donald is intent on breaking into Taipei’s government agenda, disrupting it, imposing his wishes on defense and microchips.
The “protection tax” to be paid by Taiwan invoked by Trump is not a joke. Even if it is not possible to obtain a “tribute” equal to 10 percent of the gross domestic product from the island, as claimed during the election campaign, in Washington they are convinced that the new administration will not be satisfied with less than 3-5 percent, however a blow for an executive that has allocated 2.45 percent of GDP for defense by 2024. The Taiwanese would certainly not be happy to see the DPP’s pride in spending on welfare and infrastructure reduced as a result.
But Raytheon, Northrop Grumman, Lockheed Martin and Boeing were among the main financiers of the campaign that brought Trump back to the White House (with official donations of 43,383, 52,032, 69,552 and 82,761 dollars respectively) and are now cashing in, because a good part of the orders of Trump I for Taiwan remained on paper.
And it matters little that in recent weeks a US federal inspection has found that Raytheon inflated the prices of Patriot missiles and radars sold to Taiwan by hundreds of millions of dollars. In line with the Biden administration’s policy, Trump would be oriented towards favoring the delivery – rather than fighters and tanks – of tools for asymmetric warfare, maintenance and training.
Recently the defense minister, Chiu Kuo-cheng, confirmed the “permanent” presence of US Green Berets (according to local media in the islets of Kinmen and Penghu) with the task of preparing the Taiwanese military for a Ukrainian-style response to an possible forceful action by the PLA.
The Tsmc jewel in the crosshairs
In addition to the size of the “protection tax”, the tug-of-war between Trump and Taiwan will be over microprocessors, with the president-elect sending a clear message, accusing the island of “taking 100 percent of the business of America’s chips.”
In recent days, the Minister of Economy, JW Kuo, has intervened to ensure that the Taiwanese TSMC will not be able to produce the most advanced microchips (2 nanometers) abroad, because this is prohibited by the rules on the protection of technology made in Taiwan. Kuo made the comments in response to concerns that TSMC could be forced to churn them out of its Arizona plants as a result of Trump’s return.
The fear of a conflict with the PRC has already convinced the global leader in microchips to accelerate localization abroad: in Arizona (with an investment of 12 billion dollars), in Japan (20 billion) and in Dresden, Germany ( 11 billion). A massive exodus of the production of modern industrial and defense brains – which are manufactured in Taiwan at unbeatable costs and which are easily exportable – justifiable only if tension between the two sides of the Strait is kept high.
“The United States has ordered Taiwan Semiconductor Manufacturing Co (TSMC) to stop shipping advanced chips, often used in artificial intelligence applications, to Chinese customers,” CommonWealth Magazine reported a few days ago.
The Commerce Department sent a letter to TSMC imposing export restrictions on some sophisticated chips destined for China that power artificial intelligence accelerators and graphics processing units.
According to the authoritative Taiwanese newspaper «the unprecedented US order comes only a few weeks after TSMC notified the outgoing administration that one of its chips had ended up exactly where the US government did not want it: in a processor produced by Huawei ». So far the DPP has always responded “yes sir” to Washington’s call, but now on weapons and microchips Trump promises to subject Lai and his companions to an unprecedented stress test.
