Trump suggests Taiwan should pay for defense, causing TSMC stock to drop

From Investing.com: 2024-07-16 23:15:58

Republican presidential candidate Donald Trump stated that Taiwan should pay the United States for defense since they do not give anything in return. This caused shares of Taiwanese chip manufacturer TSMC to drop. TSMC is a major maker of advanced chips used in various applications, and any conflict over Taiwan could impact the world economy.

In response, Taiwan Premier Cho Jung-tai emphasized the good relations between Taiwan and the US, despite the lack of formal ties. He highlighted Taiwan’s dedication to strengthening its defenses and its commitment to international security. The US is Taiwan’s main international supporter and arms supplier, although there is no formal defense agreement.

President Joe Biden’s remarks about defending Taiwan if attacked have unsettled China, breaking from the previous US policy of “strategic ambiguity”. The US and Taiwan have had no official diplomatic or military relationship since 1979, when the US recognized Beijing. TSMC’s shares fell more than 2% following Trump’s comments, but analysts believe it is just political rhetoric.

Taiwan is investing billions in developing new chip factories, including in the US, with most of its manufacturing operations remaining in Taiwan. The country also has a backlog of $19 billion worth of arms deliveries from the US, which officials have pledged to expedite. Recent delays in delivering weapons to Taiwan have been attributed to supporting Ukraine against Russia.



Read more at Investing.com: Trump says Taiwan should pay for defence, sending TSMC stock down By Reuters