Taiwan Should Pay for US Defence, Says Donald Trump

In a recent interview with Bloomberg Businessweek, US Republican presidential candidate Donald Trump sparked controversy by suggesting that Taiwan should pay the United States for its defence. Trump’s comments sent shares of Taiwanese chip manufacturer TSMC plummeting by over 2% on Wednesday.

According to Trump, Taiwan has taken 100% of the US chip business and should compensate the country for its defence. "We’re no different than an insurance company," Trump said. "Taiwan doesn’t give us anything." TSMC is the world’s largest contract chipmaker and a major supplier to Apple and Nvidia.

Taiwan Premier Cho Jung-tai responded to Trump’s comments, stating that Taiwan and the US have good relations despite the lack of formal ties. He emphasized that Taiwan is dedicated to bolstering its defences and has strengthened its defence budget. "Taiwan has steadily strengthened its defence budget and demonstrated its responsibility to the international community," he said.

The US is Taiwan’s most important international supporter and arms supplier, but there is no formal defence agreement. The US is, however, bound by law to provide Taiwan with the means to defend itself. Taiwan’s government has made defence modernisation a priority, including developing its own submarines, and has said many times that the island’s security rests in its own hands.

The US has been a key supporter of Taiwan, with President Joe Biden recently upsetting the Chinese government by suggesting that the US would defend Taiwan if it were attacked. This deviation from the US’s long-held position of "strategic ambiguity" has raised tensions with China.

China views Taiwan as its own territory and has been increasing military activity around the island in recent years. Taiwan has complained of repeated Chinese military activity, including the deployment of balloons and almost daily air force missions near the island.

The US has a backlog of arms deliveries worth $19 billion to Taiwan, which officials and politicians have pledged to speed up. Taiwan has also been developing its own defence capabilities, including submarines, and has said that it is willing to take on more responsibility for its own security.

In the meantime, TSMC is spending billions building new factories overseas, including $65 billion on three plants in the US state of Arizona. The company says most manufacturing will remain in Taiwan.

The controversy surrounding Trump’s comments highlights the complex and sensitive relationship between the US, Taiwan, and China. As tensions continue to escalate, it remains to be seen how the situation will unfold.