Last week, U.S. officials floated a plan to split the work, half the chips America needs made right there at home. But Taiwan? Not having it. This clash hits right at the heart of gadgets, cars etc causing you to question who truly controls the tech industry.
It started when Howard Lutnick, the U.S. Commerce Secretary, chatted with Taiwanese leaders during talks in Washington. On September 28, 2025, he laid it out plain: America aims to increase its chip production to supply 50% of its own consumption, pulling factories and jobs from Taiwan's soil to places like Arizona and Texas.
Why? Think back to those pandemic headaches when chip shortages stalled car production and jacked up prices. Taiwan's TSMC, the king of chip factories, already pumps billions into American plants, $165 billion promised so far. But Lutnick pushed for more, saying it's key for defense drones and everyday smartphones.
Taiwan's top negotiator, Vice Premier Cheng Li-chiun, flew back to Taipei on October 1 and shut it down quick. "We never agreed to that split," she told reporters at the airport. She explained that no single country can dominate the entire chip industry because it’s too complex, with experts spread across the globe.
Taiwan is already facing a 20% U.S. tariff on its exports, mostly technology products, and it's offering boosts like more energy buys from America and hiking defense spending past 3% of its budget.
They argue that requiring half the production to be moved to the U.S. is a non-starter, as it could weaken their competitive advantage in the booming AI race. This debate is important because chips are essential for everything from your morning coffee maker to fighter jets. If talks sour, prices could climb again, hitting wallets everywhere.
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