TAIPEI (Reuters) – Shares in Taiwanese chipmaker TSMC fell on Wednesday after Republican U.S. presidential candidate Donald Trump said Taiwan should pay for its defence because the United States was giving it nothing.
“I know the Taiwanese people very well and I have a lot of respect for them. They took about 100 percent of our semiconductor business. I think Taiwan should pay for our defense,” Trump said in a June 25 interview with Bloomberg Businessweek that was made public on Tuesday.
“You know, we’re no different from insurance companies. Taiwan is not giving us anything.”
The United States is Taiwan’s most important international backer and arms supplier, but there is no formal defense agreement between the two countries. However, the United States is obligated by law to provide Taiwan with the means to defend itself.
Taiwan, which China considers its territory, has complained about increased Chinese military activity over the past four years as Beijing tries to exert pressure on the democratically ruled island, which rejects China’s claims of sovereignty.
U.S. President Joe Biden angered Beijing with comments that suggested the United States would defend Taiwan if attacked, a departure from America’s longstanding position of “strategic ambiguity.”
Washington and Taipei have had no formal diplomatic or military ties since 1979, when the United States recognized Beijing.
There was no immediate reaction from the Taiwanese government or from TSMC, which is currently in a period of quiet ahead of releasing its second-quarter earnings on Thursday.
Shares of Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chip manufacturer and a key supplier to Apple (NASDAQ:) and Nvidia (NASDAQ:), fell more than 2% on Wednesday morning. The broader market was down about 0.4%.
TSMC is spending billions of dollars to build new factories overseas, including a $65 billion investment in three factories in the U.S. state of Arizona, but says the bulk of its manufacturing will remain in Taiwan.
Taiwan is also facing delayed arms deliveries worth about $19 billion from the United States, and U.S. officials and politicians have repeatedly pledged to speed up the deliveries.
Since 2022, Taiwan has complained about delays in deliveries of U.S.-made weapons such as Stinger anti-aircraft missiles as manufacturers focus on supplying Ukraine to fight Russian aggression.
Congress passed a sweeping foreign aid package in April that included arms support for the island after House Republican leadership abruptly reversed course and authorized a vote on $95 billion in mostly military aid to Ukraine, Israel, Taiwan and U.S. partners in the Indo-Pacific region.
