Taiwan downplays tariff tensions with the US as 'frictions between friends'

Taiwanese president Lai Ching-te said on 20 May, Tuesday, that trade tensions between the United States and Taiwan are just “frictions between friends”, in a show of optimism while tariff negotiations are underway with Washington.

US president Donald Trump imposed 32 per cent tariffs on all imports from Taiwan as part of sweeping duties levied against all US trading partners last month.

The tariffs on Taiwanese goods were subsequently lowered to 10 per cent for 90 days to allow for trade negotiations. Officials from both sides held a first round of talks last month, to be followed by another one in the coming weeks.

In a speech marking his first year as president and focusing on Taiwan’s strategies to defuse the effects of US tariffs and military threats from China, Lai Ching-te struck an accommodating tone despite the tariff pressure.

The US and Taiwan have long “cooperated and have also encouraged each other to grow,” he said. “There are bound to be frictions between friends, but they can eventually be reconciled.”

“Even if there are differences of opinion, as long as there is a foundation of trust and sincere dialogue, they can understand each other better and deepen their friendship,” he added.

The US has traditionally been Taiwan’s strongest unofficial ally in the face of military threats by China, which considers the self-ruled island its own territory, to be retaken by force if necessary. Washington is bound by its own laws to provide Taipei with the means to defend itself.

Lai said Taiwan would continue to strengthen its national defence capabilities, both through foreign military procurement and domestic arms development, and stand “shoulder to shoulder” with its allies “to exert deterrent power”.

“We will prepare adequately to avoid war and achieve the goal of peace,” he said.

He kept open the possibility of talks with Beijing, saying that “Taiwan is very willing to engage in exchanges and cooperation with China” as long as there is mutual respect and dignity.

Taiwan’s economy is supported by massive semiconductor firms that supply microchips globally as well as other electronics, advanced manufacturing and green tech makers.

Lai said he would continue to encourage foreign investment in Taiwan, citing 19 May, Monday’s announcement by American technology company Nvidia about opening a new office in northern Taipei.

Nvidia’s Taiwan-born CEO, Jensen Huang also announced his company would build an artificial intelligence supercomputer on the island in partnership with TSMC, tech firm Foxconn and the Taiwanese government.

He also backed increased investments by Taiwanese firms in the US.

In March, the island’s largest chipmaker, TSMC, responded to Trump’s tariff threats by pledging a new USD 100 billion investment in the US, in addition to earlier commitments to invest more than $65 billion in three factories in Arizona, one of which began production late last year.

However, Lai’s controversial proposal to completely remove tariffs on US goods “on the basis of reciprocity”, in addition to bumping up procurement of US products, triggered protests last week by Taiwanese farmers.