Trump pressures Taiwan with tariff threat, demands TSMC take 49% Intel stake and invest $400 billion in US

Tensions between the United States and Taiwan have escalated after former U.S. President Donald Trump reportedly issued a bold ultimatum tying tariff reductions to a massive business deal. According to reports from Mnews, Trump has proposed a 20% tariff on Taiwanese exports—unless Taiwan’s semiconductor giant, TSMC, agrees to acquire a 49% stake in Intel and invest an additional $400 billion in the U.S. economy.

The proposed tariff, significantly higher than the 15% rates applied to Japan and South Korea, has alarmed Taiwan’s business community. Industry leaders warn that the financial impact of such a tariff—combined with a stronger exchange rate—could create a competitive gap of nearly 15%, severely hurting Taiwanese manufacturers and exporters.

Hsu Shu-po, Chairman of the Taiwan Chamber of Commerce, described the 5% tariff gap as “hugely damaging,” while executives from major Taiwanese companies noted that the exchange rate and tariff combination has created a near-crisis for export competitiveness. Last year, Taiwan’s trade surplus with the U.S. reached $73.9 billion—exceeding that of Japan and South Korea—prompting Washington to demand more concessions from Taipei.

At the center of the standoff is TSMC, the world’s largest contract chipmaker. Trump’s conditions reportedly focus on the company’s potential role in reshaping the U.S. semiconductor landscape. Industry sources say TSMC Chairman Wei Zhejia is under immense pressure, with Trump's demands seen as a direct attempt to shift tech dominance back to the U.S.

Analysts, however, have pushed back strongly. Veteran semiconductor analyst Chen Huiming called the proposed conditions “unacceptable,” warning of excessive political interference in a private business. He stressed that TSMC is a national strategic asset for Taiwan and cautioned against compromising its independence. “TSMC has already committed $165 billion in U.S. investments,” said another tech analyst, arguing that no combination of concessions—ranging from arms purchases to energy deals—could match the value Washington places on semiconductors.

The situation is further complicated by the fact that the Taiwanese government holds only a 6.38% stake in TSMC through its National Development Fund, meaning the final decision lies with TSMC’s board and leadership—not state officials.

Ultimately, the impasse highlights how semiconductors and tech supremacy have become central to U.S.-China geopolitical tensions, with Taiwan caught in the crossfire. As Washington seeks to localize key technologies and manufacturing, the fate of one of the world’s most valuable tech firms could hinge on whether it's willing to align more closely with American strategic interests.